Gold, silver hit 4-week highs on improved charts, inflation worries

Gold and silver prices are higher in midday U.S. trading Thursday and hit four-week highs. The metals are being propelled up by improving near-term chart postures and lingering concerns about rising and even problematic price inflation. December gold futures were last up $4.30 at $1,798.80. December Comex silver was last up $0.34 at $23.51 an ounce.

The U.S. data point of the day Thursday saw the producer price index report for September come in at up 0.5% from August, compared to expectation of a 0.6% rise and compares to a 0.7% rise reported in the August report. 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 and silver traders may be finally realizing that rising inflationary pressures are bullish for metals, as history shows.

Global stock markets were mixed but mostly higher in overnight trading. The U.S. stock indexes are solidly higher at midday. The rally in the equities did temper gains in the safe-haven metals today. U.S. corporate earnings reports are featured this week.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil futures are higher and trading around $81.75 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching around 1.54%.

Technically, December gold futures bulls have the overall near-term technical advantage amid a fledgling uptrend in place on the daily bar 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 today’s high of $1,801.90 and then at $1,810.60. First support is seen at today’s low of $1,787.60 and then at $1,775.00. Wyckoff's Market Rating: 6.0

December silver futures bears still have the slight overall near-term technical advantage. However, gains this week have started a price uptrend on the daily chart and also suggest a market bottom is in place. Silver bulls' next upside price objective is closing 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 $22.00. First resistance is seen at $23.75 and then at $24.00. Next support is seen at $23.00 and then at $22.50. Wyckoff's Market Rating: 4.5.

December N.Y. copper closed up 1,095 points at 462.60 cents today. Prices closed near the session high today and hit a 4.5-month high. The copper bulls have the overall near-term technical advantage and gained more power today. Prices are in a steep three-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the May high of 487.05 cents. The next downside price objective for the bears is closing prices below solid technical support at 430.00 cents. First resistance is seen at today’s high of 463.85 cents and then at 470.00 cents. First support is seen at 450.00 cents and then at 447.15 cents. Wyckoff's Market Rating: 7.5.

By Jim Wyckoff

For Kitco News

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