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Price gains for gold, silver, on inflation worries, weaker greenback

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(Kitco News) - Gold and silver prices are higher in early U.S. trading Friday, supported by increasing worries about problematic price inflation and by a lower U.S. dollar index to end the trading week. Friendly charts are also inviting speculators to the long side of gold and silver. December gold futures were last up $11.80 at $1,793.50. December Comex silver was last up $0.205 at $24.375 an ounce.

It appears the gold and silver markets have finally awakened to the fact global inflation is rising and probably won't be just transitory. Gold prices have been trending higher since late-September and silver prices this week hit a six-week high. History shows hard assets like the precious metals become more in favor as an inflation hedge when consumer and producer prices are rising.

Global stock markets were mixed to firmer in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins, with the S&P stock index futures poking to a new contract and record high overnight. Very upbeat corporate earnings reports have boosted trader and investor risk sentiment the past couple weeks. For the moment it appears the marketplace has pushed to the back burner rising inflation and the prospect of major global economies slowing down in their post-pandemic recoveries. Dow Jones Newswires ran a story this morning headlined, "Supply-chain bottlenecks crimp global growth, boost inflation." The report said worsening supply chain constraints around the world and the record surge in the price of some raw materials "is dragging on the world economy, suggesting a slowdown this summer will extend through the end of this year."

The key outside markets today see the U.S. dollar index weaker. Crude oil prices are higher and trading around $82.80 a barrel after hitting a seven-year high Thursday. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.685%.

U.S. economic data due for release Friday includes the flash manufacturing and services purchasing managers indexes.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures bulls have the overall near-term technical advantage as prices are trending higher on the daily chart. Bulls' next upside price objective is to produce a close above solid resistance at the October high of $1,801.90. 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 today's high of $1,796.20 and then at $1,800.00. First support is seen at the overnight low of $1,783.60 and then at $1,775.00. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the overall near-term technical advantage. Prices are in a three-week-old uptrend. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $22.50. First resistance is seen at this week's high of $24.55 and then at the September high of $24.945. Next support is seen at the overnight low of $24.185 and then at $24.00. Wyckoff's Market Rating: 6.0.

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.