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Gold sharply up as USDX, U.S. bond yields plummet after cooler CPI

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(Kitco News) - Gold and silver prices are solidly higher in midday U.S. trading Thursday, with gold scoring a 2.5-month high and silver a 4.5-month high, following a U.S. inflation report that came in just a bit cooler than market expectations and in turn pushed the U.S. dollar index and U.S. Treasury yields sharply lower. December gold was last up $38.60 at $1,737.90 and December silver was up $0.323 at $21.66.

The U.S. consumer price index report for October came in up 7.7%, year-on-year, versus expectations for a rise of 7.9%, year-on-year, and compares to the 8.2% rise seen in the September report. This report may be the most important data point of the month, if not the quarter. A slightly cooler reading in the CPI print may influence the Federal Reserve"s decision-making process ahead of its December FOMC meeting. The Wall Street Journal is reporting the Fed is likely to raise its Fed funds rate by 0.5% in December, following a string of 0.75% increases at past FOMC meetings.

The U.S. stock indexes soared on the cooler CPI print, with Bitcoin also posting solid gains after the report. However, the crypto currency markets remain in turmoil late this week, with fears of a contagion effect and more illiquidity in the cryptos. Broker SP Angel this morning reports in an email dispatch: A proposed takeover of likely insolvent FTX crypto exchange by rival Binance is set to fail, sending Bitcoin down 26% this week and triggering concerns of wider market contagion. FTX exchange, whose founder Sam Bankman-Fried (likened to John Pierpont Morgan during the banking crisis of 1907), is looking for support for a reported $8 billion debt shortfall. The exchange"s insolvency has triggered a further step down in crypto market values, with the total crypto market cap standing at $914 billion, down from over $3 trillion in November 2021. JP Morgan are reporting crypto market participants are facing a "cascade" of margin calls, although it is unclear whether this will feed into wider equity markets.

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The key outside markets today see the U.S. dollar index sharply down and hit a two-month low after the cooler CPI. Nymex crude oil prices are higher and trading around $87.25 a barrel. The 10-year U.S. Treasury note is yielding 3.852% and has fallen sharply in the wake of the cooler CPI report.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures prices hit a 2.5-month high today. The gold futures bulls and bears are back on a level overall near-term technical playing field. Bulls have momentum as a price downtrend on the daily bar chart has been negated. Prices this week have also seen a bullish upside breakout from a trading range, to suggest still more upside in the near term. 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 November low of $1,618.30. First resistance is seen at today"s high of $1,757.20 and then at $1,775.00. First support is seen at $1,738.70 and then at $1,725.00. Wyckoff's Market Rating: 5.0.

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures prices hit a 4.5-month high today. The silver bulls have the overall near-term technical advantage and have momentum. Prices are in a choppy nine-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at today"s high of $21.94 and then at $22.50. Next support is seen at $21.00 and then at this week"s low of $20.435. Wyckoff's Market Rating: 6.5.

December N.Y. copper closed up 720 points at 377.15 cents today. Prices closed nearer the session high and hit a four-month high today. The copper bulls have gained the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 330.30 cents. First resistance is seen at 380.00 cents and then at 390.00 cents. First support is seen at today"s low of 362.85 cents and then at this week"s low of 356.25 cents. Wyckoff's Market Rating: 6.0.

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