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Gold, silver lose solid early price gains after U.S. CPI lifts U.S. dollar

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(Kitco News) - Gold and silver prices are posting slight gains in early U.S. trading Tuesday, after a brief rally that pushed prices solidly higher just before a key U.S. inflation report was released. The U.S. dollar index paring its overnight losses in the wake of the U.S. consumer price index report for September that was just a bit hotter than expected has taken some wind out of the sails of the precious metals market bulls. December gold futures were last up $2.60 at $1,762.00. December Comex silver was last up $0.216 at $22.73 an ounce.

The focus of the marketplace at mid-week is on the U.S. consumer price index report for September, which came in at up 0.4% from August and up 5.4%, year-on-year. The numbers were
expected up 0.3% from August and up 5.3% year-on-year. Today’s slightly warmer CPI data arguably lands in the camp of the U.S. monetary policy hawks, who want to see the Federal Reserve tighten its monetary policy sooner rather than later. The U.S. dollar index gained some ground after the CPI report was released but is still trading slightly down on the day. Rising energy costs and supply-chain bottlenecks in recent weeks have traders and investors even more keenly focused on inflation prospects in the months ahead. The Federal Reserve will closely scrutinize today’s CPI data as it mulls the timing of tapering its monthly government bond purchases (quantitative easing).

Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins.

In overnight news, China reported its exports in September were up 28.1%, year-on-year, while imports were up 17.6%. The exports number was a bit higher than expected and the imports number a bit lower than expected.

The key outside markets today see the U.S. dollar index just slightly lower but nearer the daily high. Nymex crude oil futures are weaker and trading around $80.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching around 1.57%.    

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the FOMC minutes and the monthly Treasury budget statement.

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. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,721.10. First resistance is seen at the overnight high of $1,778.50 and then at the October high of $1,782.40. First support is seen at today’s low of $1,758.00 and then at this week’s low of $1,749.90. Wyckoff's Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.41. First resistance is seen at today’s high of $22.965 and then at the October high of $23.22. Next support is seen at the overnight low of $22.48 and then at this week’s low of $22.325. Wyckoff's Market Rating: 2.5.

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.