Gold and Silver Prices Surge on Tamer U.S. Inflation Data and Market Speculation of a Spring Rate Cut

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Gold and Silver Prices Surge on Tamer U.S. Inflation Data and Market Speculation of a Spring Rate Cut

Gold and silver prices exhibited notable gains during midday U.S. trading on Thursday, reaching a two-week high for gold and a six-week high for silver. This surge is fueled by subdued U.S. inflation data, which led to a decline in the U.S. dollar index. Additionally, market sentiment is leaning towards a potential Federal Reserve interest rate cut in the upcoming spring.

The short-term technical outlook for both gold and silver has improved, prompting increased interest from chart-based buying among futures market speculators. As of the latest update, December gold rose by $21.20 to $1,985.70, while December silver increased by $0.392 to $23.935.

In contrast, U.S. stock indexes experienced weakness during midday, undergoing corrective pullbacks after recent robust gains that propelled them to multi-week highs on Wednesday. The market’s risk appetite has been on the rise this week, partly influenced by more moderate U.S. inflation reports, suggesting the Federal Reserve might conclude its interest rate increase cycle, potentially leading to a rate cut in the spring.

gold price chart image

Additionally, despite several weeks into the Israel-Hamas conflict, major involvement from other countries, including the U.S. and Iran, has not materialized, contributing to an uneasy geopolitical situation.

Metal enthusiasts anticipate the continuation of an accommodating Fed policy, further devaluing the U.S. dollar, pushing Treasury yields downward, and fostering increased global demand for metals, especially now that interest rates may have peaked.

Examining other key markets, the U.S. dollar index is marginally lower, while Nymex crude oil prices experienced a sharp decline, reaching a four-month low and trading around $73.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently at 4.469%.

From a technical perspective, December gold futures bulls have gained a slight overall near-term advantage, with the next upside price objective set at closing above solid resistance at $2,000.00. On the downside, bears aim to push futures prices below strong technical support at $1,900.00.

The first resistance is observed at today’s high of $1,991.10, followed by $2,000.00, while the initial support lies at $1,975.00 and then at today’s low of $1,959.00. The Wyckoff Market Rating stands at 5.5.

December silver futures reached a six-week high, with silver bulls holding the overall near-term technical advantage and momentum. The next upside price objective for silver bulls is closing prices above solid technical resistance at $25.00.

silver price chart image

Conversely, bears seek closing prices below substantial support at this week’s low of $21.925. Initial resistance is identified at today’s high of $24.165 and then at $24.50, while the first support is at today’s low of $23.35 and then at $23.00. The Wyckoff Market Rating is 6.0.

Closing down 230 points at 369.55 cents, December N.Y. copper prices experienced a decline. The copper bears currently hold a slight overall near-term technical advantage. Copper bulls aim to push and close prices above solid technical resistance at 385.00 cents, while bears target closing prices below substantial technical support at the October low of 351.95 cents.

The first resistance is observed at today’s high of 374.25 cents and then at 378.60 cents, with initial support at Wednesday’s low of 366.80 cents and then at 365.00 cents. The Wyckoff Market Rating is 4.5.

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