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Gold, Silver Prices Weaker; Hotter PPI Adds Some Pressure

Kitco News

(Kitco News) - Gold prices are modestly lower in early U.S. trading Tuesday, amid a lack of fresh, bullish fundamental news to support the safe-haven metal. December Comex gold was last down $5.30 an ounce at $1,273.60. December Comex silver was last down $0.092 at $16.955 an ounce.

The U.S. October producer price index (PPI) came in at up 0.4%, which was much hotter than the consensus forecast of up 0.1%. Gold and silver markets prices down-ticked a bit after the PPI report. The PPI report is one of the more important reports of the week.

Slowing economic growth data in China also is a negative for the precious metals markets Tuesday. China’s October industrial production was reported up less than expected. Meanwhile China’s October retail sales saw the slowest pace of growth this year.

In other overnight news, the Euro zone reported its third-quarter GDP at up 0.6% from the second quarter and up 2.5%, year-on-year. Those numbers were right in line with market expectations.

World stock markets were mixed but mostly weaker overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Stock market traders early this week are concerned about slack progress on the U.S. tax-reform legislation working its way through Congress.

The key outside markets on Tuesday find U.S. dollar index lower in early U.S. trading. The greenback bulls still have the slight overall near-term technical advantage, but trading has turned choppy.

Meantime, Nymex crude oil futures prices are weaker and are trading around $56.50 a barrel. It is still my bias that Nymex crude won’t be able to sustain prices at or above $60.00 a barrel. The IEA warned on Tuesday the oil price rally is in jeopardy because of weaker-than-expected demand this year and likely next year, too.

Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures bulls and bears are on a level overall near-term technical playing field. 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 the October low of $1,262.80. First support is seen at today’s low of 1,269.70 and then at $1,265.90. First resistance is seen at 1,280.00 and then at $1,285.00. Wyckoff’s Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver bulls and bears are on a level overall near-term technical playing field. The next upside price breakout objective is closing futures prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the October low of $16.345. First resistance is seen at Monday’s high of $17.07 and then at $17.27. Next support is seen at last week’s low of $16.785 and then at $16.60. Wyckoff's Market Rating: 5.0.

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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