Gold, silver fall as CPI keeps Fed pressure on
Spot gold prices are sharply lower and spot silver prices are also weaker in early U.S. trading Wednesday, as May inflation held above 4%, Treasury yields stayed elevated and U.S.-Iran tensions kept energy-risk pressure in the macro backdrop. At the time of writing, spot gold was trading near $4,165.90 an ounce, down 2.20%, while spot silver was trading at $64.645, down 1.06% on the session.
U.S. consumer prices rose 0.5% in May after a 0.6% gain in April, taking the annual CPI rate to 4.2% from 3.8%. Core CPI rose 0.2% on the month and 2.9% from a year earlier, while energy prices rose 3.9% in May and 23.5% over the past 12 months. The print keeps inflation far above the Fed’s 2% target and leaves gold exposed to the same rate-pressure trade that accelerated after last week’s payrolls report.
Washington warned Iran over stalled negotiations after U.S. strikes followed the downing of an Apache helicopter near the waterway, while Iran responded with missile and drone attacks on U.S. allies in the Gulf and Jordan. Oil is higher on restricted traffic and supply-disruption risk, but the move remains contained relative to a full closure scenario. Gold is not getting a clean safe-haven bid because higher energy prices are reinforcing sticky inflation, Treasury yields and Fed risk, while equity futures are lower as tech weakness and Middle East escalation weigh on risk appetite.
U.S. equity futures pointed lower before the open. S&P 500 futures were down 1.0%, Nasdaq futures were down 1.6% and Dow futures were down 0.9%, while the iShares Semiconductor ETF was down 3.0% in premarket trading. Super Micro Computer fell 12% after announcing a $7 billion capital raise, and Oracle was scheduled to report earnings after the close.
The key outside markets see Nymex WTI crude oil prices higher and trading around $90.00 a barrel, while Brent crude was near $92.93. The U.S. dollar index is firmer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.5% area.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,250.00 to $4,358.00 resistance zone, with a sustained move targeting $4,450.00 and then $4,595.00. Bears’ next near-term downside price objective is a break below $4,103.00, with deeper downside targets at $4,000.00 and then $3,883.00. First resistance is seen at $4,250.00 and then at $4,358.00. First support is seen at $4,103.00 and then at $3,883.00.
Spot silver bulls’ next upside price objective is to drive prices back above $65.50, with a move above that zone targeting the $69.00 to $72.00 supply area and then the 50-period moving average at $72.90. The next downside price objective for the bears is a break below $63.39, with deeper downside targets at $61.08 and then $60.00. First resistance is seen at $65.50 and then at $69.00. Next support is seen at $63.39 and then at $61.08.
