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Gold, silver hit 4-wk highs, more upside price action likely

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(Kitco News) - Gold and silver prices are posting modest gains in early U.S. trading Thursday and hit four-week highs overnight. The metals are being propelled higher by improving near-term chart postures, the U.S. dollar index backing down from its recent high, and by notions that inflation will become more problematic in the coming months. December gold futures were last up $2.60 at $1,797.30. December Comex silver was last up $0.115 at $23.28 an ounce.

Global stock markets were mixed but mostly higher in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins. U.S. corporate earnings reports are featured this week.

The U.S. data point of the day is the producer price index report for September, which is seen up 0.6% versus a 0.7% rise reported in August. The U.S. consumer price index report on Wednesday ran a little hotter than expected. Meantime, in China, its producer price index in September rose a record 10.7%, year-on-year. The August reading was up 9.5%. Recent inflation gauges from the major world economies are suggesting higher inflation may be more than just transient, as has been repeatedly suggested by Federal Reserve Chairman Jay Powell. It appears gold traders may be finally realizing that rising inflationary pressures are bullish for metals, as history shows.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures are higher and trading around $81.30 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching around 1.54%.    

Other U.S. economic data due for release Thursday includes the weekly jobless claims report and the weekly DOE liquid energy stocks report. Several Federal Reserve, IMF and World Bank officials are scheduled to speak today.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures bulls have gained the overall near-term technical advantage as prices are now trending higher on the daily chart. Bulls’ next upside price objective is to produce a close above solid resistance at the September high of $1,836.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,749.90. First resistance is seen at $1,810.60 and then at $1,825.00. First support is seen at today’s low of $1,787.60 and then at $1,775.00. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have still the overall near-term technical advantage. However, bulls are working on a fledgling price uptrend. 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 $22.00. First resistance is seen at $23.50 and then at $24.00. Next support is seen at the overnight low of $22.925 and then at $22.50. Wyckoff's Market Rating: 3.5.

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.