Gold Prices Firm Up After U.S. CPI Meets Market Expectations

(Kitco News) - Gold prices are up in early U.S. trading Tuesday, and have erased modest overnightlosses. The just-released U.S. consumer price index report posted numbers thatwere in line with market expectations, which was a relief to those traders andinvestors who were worried about hotter inflation. April Comex gold futureswere last up $4.10 an ounce at $1,325.00. May Comex silver was last up $0.119at $16.670 an ounce.

Thekey economic data point of the day Tuesday saw the U.S. consumer price indexreport for February come in at up 0.2%, and up 2.2%, year-on-year. Thosenumbers were in line with market expectations. The “core” CPI number - whichexcludes food and energy - was also up 0.2% from January and up 1.8%,year-on-year.

Inflationreadings from the world’s major economies have been creeping up recently, whichhas caused a bit of concern among traders and investors. However, with most ofthe world inflation data being reported near or just above a 2.0% riserecently, most agree there is no cause for alarm. Most major central banks ofthe world actually want to see an annual inflation rate of right around 2.0%.

Reportsthat U.S. Secretary of State Rex Tillerson has either quit or been fired mayalso be adding a bid to the safe-haven gold and silver markets.

Thekey “outside markets” on Tuesday morning see the U.S. dollar index slightlylower and off the overnight high after the CPI report came out. Meantime, Nymex crude oil prices are lower. Rising U.S. shale oil production and some reporteddiscord among OPEC leaders Saudi Arabia and Iran have put the crude oil marketon the defensive recently.

OtherU.S. economic data due for release Tuesday includes the weekly Johnson Redbookand Goldman Sachs retail sales reports, the NFIB small business index and realearnings.

Technically,Aprilgold futures bulls and bears are on a level overall near-term technicalplaying field. Gold bulls' next upside near-term price breakout objective is toproduce a close above solid technical resistance at $1,350.00. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at $1,300.00. First resistance is seen at $1,330.00 and thenat $1,335.00. First support is seen at last week’s low of $1,313.20 and then at$1,309.00. Wyckoff's Market Rating: 5.0

Maysilver futures bears have the overall near-term technical advantage. Silverbulls' next upside price breakout objective is closing prices above solidtechnical resistance at the February high of $17.04 an ounce. The next downsideprice breakout objective for the bears is closing prices below solid support at$16.00. First resistance is seen at $16.75 and then at the March high of $16.895.Next support is seen at this week’s low of $16.43 and then at last week’s lowof $16.33. Wyckoff's Market Rating: 4.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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