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Gold Market: Prices Once Again Flirting With $1,300

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(Kitco News) - Gold and silver prices are up and hit new two-week highs in early U.S. trading Thursday. Gold has moved to within a hair of the important $1,300.00 price level. The precious metals bulls are having a good week, due to several factors that include some safe-haven demand, a weakening U.S. dollar, technical buying, and Federal Reserve members without a consensus on the inflation outlook. December Comex gold was last up $7.90 an ounce at $1,296.90. December Comex silver was last up $0.107 at $17.24 an ounce.

The precious metals market are getting some residual support today from Wednesday’s minutes from the latest FOMC meeting, which saw members generally agreeing that a 0.25% December interest rate hike is in the cards. However, the marketplace perceived there to be some discord among FOMC members regarding inflation and economic growth prospects. Also, some market watchers had reckoned the FOMC minutes would sound a more hawkish tone on U.S. monetary policy, which was not the case.

World stock markets were mostly up overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. U.S. stock indexes are near this week’s record highs. Japan’s Nikkei stock index hit another 21-year high overnight. Stock market traders are not paying much attention to geopolitics at present, as their risk appetites remain strong. If the stock market community does begin to pay more attention to geopolitics (which will likely be the case) then look for increased money flows into the gold and silver markets due to keener risk aversion.

In overnight news, Euro zone industrial production in August was reported up 1.4% from July and up 3.8%, year-on-year. Those numbers were much stronger than expected and fall into the camp of the monetary policy hawks, who want the European Central Bank to start to tighten monetary policy.

The U.S. dollar index is slightly higher in early U.S. trading Wednesday, but did hit a two-week low overnight. The greenback bears have gained downside momentum this week. The other key outside market sees Nymex crude oil futures prices lower and trading just below $51.00 a barrel.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the producer price index, the weekly DOE liquid energy stock report, and the monthly Treasury budget statement. There are also several Federal Reserve officials set to deliver speeches today.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures bulls and bears are now back on a level overall near-term technical playing field but the bulls have technical momentum on their side. Bulls’ next upside technical objective is pushing and closing prices above chart resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,262.80. First resistance is seen at 1,300.00 and then at $1,307.00. First support is seen at the overnight low of 1,293.80 and then at Wednesday’s low of $1,286.80. Wyckoff’s Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver bulls have regained the slight overall near-term technical advantage. The next upside price breakout objective is closing futures prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $16.345. First resistance is seen at $17.445 and then at $17.50. Next support is seen at $17.00 and then at this week’s low of $16.765. Wyckoff's Market Rating: 5.5.

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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