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Gold price rallies following another cooler U.S. inflation report

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(Kitco News) - Gold and silver prices are higher in early U.S. trading Tuesday, following another U.S. inflation report that came in a bit cooler than expected. Gold prices hit a three-month high and silver prices a five-month high today. December gold was last up $12.90 at $1,788.90 and December silver was up $0.102 at $22.21.

The just-released U.S. data point of the day saw the producer price index report for October come in at up 8.0%, year-on-year, compared to a rise of 8.3% that was the consensus forecast. The month-on-month figures showed a rise of 0.2% from September, compared to a rise of 0.4% that was expected. The core PPI reading was unchanged in October, compared to expectations for a rise of 0.3%. Other components of the PPI report were also a bit cooler than expected. The U.S. dollar index dropped sharply on the news, while U.S. Treasury yields fell. The benchmark U.S. Treasury 10-year note yield is presently fetching 3.783%. U.S. stock indexes rallied.

Global stock markets were steady to mixed overnight. U.S. stock indexes are headed for solidly higher openings when the New York day session begins. Trader and investor risk attitudes were already more upbeat Tuesday, before the PPI report, on notions the Federal Reserve will at its December meeting start to back off on its aggressive tightening of U.S. monetary policy. Monday’s face-to-face meeting between U.S. President Biden and Chinese leader Xi Jinping also has boosted hopes the world’s two largest economies can become less adversarial. Also positive for the marketplace are recent moves by China to ease up on its Covid restrictions.

In overnight news, the Euro zone third-quarter GDP came in at up 2.1%, year on year, which was slightly above market expectations.

The other key outside market today sees Nymex crude oil prices weaker and trading around $85.25 a barrel.

Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales indexes and the Empire State manufacturing survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls and bears are on a level overall near-term technical playing field but the bulls have momentum. 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 last week’s low of $1,667.10. First resistance is seen at $1,800.00 and then at the August high of $1,824.60. First support is seen at the overnight low of $1,770.20 and then at this week’s low of $1,755.80. Wyckoff's Market Rating: 5.0.

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the firm overall near-term technical advantage. A choppy, 2.5-month-old uptrend is in place 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 the overnight high of $22.38 and then at $22.80. Next support is seen at this week’s low of $21.37 and then at $21.00. Wyckoff's Market Rating: 6.5.

A fundamental shift is driving gold prices closer to $1,800 - MKS' Shiels

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.