(Kitco News) - Gold prices are weaker in early U.S. trading Friday, following a stronger-than-expected U.S. retail sales report that fell into the monetary policy hawks’ camp. Silver prices are near steady. Gold prices are headed for the biggest weekly price decline since 2021, down nearly 5% on the week. December gold was last down $6.10 at $2,566.70 and December silver was up $0.026 at $30.62.
The U.S. data point of the day Friday saw the retail sales report for October come in at up 0.4%, month-on-month, which is a bit hotter that trader expectations for up 0.3% and follows a big revised rise of 0.8% in the September report, originally reported at up 0.4%. The hotter CPI data follows the U.S. consumer and producer price index reports this week that showed “sticky” inflation.
Federal Reserve Chair Jerome Powell spoke Thursday afternoon and leaned a bit hawkish on U.S. monetary policy. Said David Morrison of Trade Nation this morning in an email dispatch: Powell “managed to spook markets during a speech and Q&A session last night. He said that the U.S. economy is not giving out signals to suggest that the U.S. central bank should be in a hurry to lower rates. His comment led to a pullback in equities and a rally in bond yields. There was also a sharp reversal in rate-cut expectations as measured by the CME’s FedWatch Tool. Thursday morning, the probability of a 25 basis-point rate cut at the Fed’s FOMC meeting next month stood at 82%. This dropped to 62% in the aftermath of Powell’s comments.” Meantime Boston Federal Reserve said Thursday a December Fed rate cut is “certainly on the table but it's not a done deal.”
The key outside markets today see the U.S. dollar index near steady after hitting a six-month high Thursday. Nymex crude oil futures prices are down and trading around $68.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.449%.
Other U.S. economic data due for release Friday includes the Empire State manufacturing survey, import and export prices, industrial production and capacity utilization, and manufacturing and trade inventories.
Technically, December gold bears have the overall near-term technical advantage. Prices are trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,650.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support $2,500.00. First resistance is seen at Thursday’s high of $2,585.80 and then at $2,600.00. First support is seen at the overnight low of $2,558.90 and then at this week’s low of $2,541.50. Wyckoff's Market Rating: 4.0.
December silver futures bears have the overall near-term technical advantage. Prices are trending down on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $32.00. The next downside price objective for the bears is closing prices below solid support at $28.00. First resistance is seen at $31.00 and then at $31.25. Next support is seen at the overnight low of $30.305 and then at $30.00. Wyckoff's Market Rating: 4.0.
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