Gold price weaker as U.S. CPI looms

(Kitco News) - Gold and silver prices are down a bit in subdued early U.S. trading Tuesday. A firmer U.S. dollar index so far today is a negative outside market element pressuring the metals markets. Metals traders are anxiously awaiting a U.S. inflation report on Wednesday. December gold was last down $6.90 at $1,940.30 and December silver was down $0.058 at $23.325.

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Traders and investors are waiting for the U.S. consumer price index report for August, due out Wednesday morning. The CPI is expected to be up 4.3%, year-on-year, versus a 4.7% rise in the July report. Look for more active trading in many markets in the immediate aftermath of the CPI report—especially if it’s a miss from market expectations.

Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed to weaker openings when the New York day session begins. Equities traders are not quite half-way through what can be the tumultuous month of September, and the bulls are holding their own--so far. Six more weeks to go before the bulls can breathe easier, however, as October can also be a rocky month for the stock markets.

The European Central Bank also holds its regular monetary policy meeting this week and is expected to slightly raise its main interest rate by 0.25 percent.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher and trading around $88.00 a barrel. The benchmark U.S. Treasury 10-year note yield is presently fetching 4.284%.

U.S. economic data due for release Tuesday includes the NFIB small business index and the weekly Johnson-Redbook retail sales report.

Technically, the gold futures bears have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the September high of $1,980.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,913.60. First resistance is seen at this week’s high of $1,954.60 and then at $1,965.00. First support is seen at the overnight low of $1,935.40 and then at $1,925.00. Wyckoff's Market Rating: 3.5

The silver bears have the overall near-term technical advantage. A bearish pennant pattern has formed on the daily bar chart. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at last week’s high of $24.655. The next downside price objective for the bears is closing prices below solid support at the August low of $22.585. First resistance is seen at this week’s high of $23.515 and then at $24.00. Next support is seen at the September low of $23.13 and then at $23.00. Wyckoff's Market Rating: 3.5.

By

Jim Wyckoff

For Kitco News

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