In midday U.S. trading on Tuesday, gold prices experienced a slight increase following a subdued U.S. producer price inflation report, while silver prices declined. Traders in the precious metals market are eagerly anticipating upcoming key U.S. data releases scheduled for Wednesday and Thursday. As of the latest update, December gold was up by $3.90, reaching $2,507.90, while September silver saw a decrease of $0.268, settling at $27.745.
The week’s data releases commenced on Tuesday morning with the July producer price index, which showed a modest uptick of 0.1%. The core producer price index, excluding food and energy, remained unchanged from June, aligning with the views of U.S. monetary policy doves advocating for potential Federal Reserve interest rate cuts.
Wednesday will bring the closely watched consumer price index for July, expected to rise by 0.2% month-on-month. Additionally, Thursday’s retail sales report will be closely monitored by market participants.
Amidst economic developments, geopolitical tensions are adding to the market sentiment. Reports indicate warnings from the U.S. government regarding a potential imminent attack on Israel by an Iranian or Iranian proxy group, alongside news of Ukrainian military activity within Russian territory. These factors are driving mild safe-haven demand towards the gold market, with expectations of further escalation before potential de-escalation.
In the broader financial landscape today, the U.S. dollar index is down, while Nymex crude oil prices are trading around $78.75 per barrel. A headline from DowJones Newswire highlights concerns about China’s oil-demand growth slowdown impacting the global outlook. The benchmark 10-year U.S. Treasury note is currently yielding around 3.8%.
From a technical perspective, December gold bulls maintain a strong near-term advantage, with the next upside target set at surpassing solid resistance at the contract high of $2,537.70. Conversely, silver futures for September are currently favoring bears, reflecting a downtrend on the daily chart. Silver bulls aim for a breakthrough above technical resistance at $29.355, while bears eye a decline below solid support at $26.00. Key levels for gold and silver are closely monitored, underpinning market sentiments amidst evolving economic and geopolitical landscapes.
