Gold, silver recover most of sharp, early losses

Gold and silver prices are modestly lower in midday U.S. trading Thursday but have made a solid rebound from early-morning losses following another hot U.S. inflation report. Strong losses in the U.S. dollar index and higher crude oil prices today are working in favor of the precious metals market bulls. However, rising U.S. Treasury yields are still keeping buyers in gold and silver timid. December gold was last down $4.30 at $1,673.30 and December silver was down $0.093 at $18.845.

Today’s highly anticipated U.S. consumer price index report for September showed a rise of 0.4% from August, which was just above the expected rise of 0.3%. Year-on-year, the CPI was up 8.2%. The report was expected to come in at up 8.1%, year-on-year, following a rise of 8.3% in August. On Wednesday the U.S. got a hot producer price index reading for September, at up 8.5%, year-on-year. U.S. Federal Reserve officials have recently reiterated their aggressively hawkish stance on monetary policy, which has kept the general marketplace uneasy, for fear of pending U.S. and/or global recession. Today’s CPI report suggests the Fed is correct regarding its belief that inflation is still not under control.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are solidly higher at midday after dropping sharply after the CPI report.

Now is the time to find value in the junior mining sector - Radisson Mining director Michael Gentile

Before the CPI data, risk appetite in the general marketplace had up-ticked on reports the U.K. government is going to roll back its controversial tax and spending plans that had roiled the financial markets the past two weeks. The British pound rallied and U.K. bond yields fell on the news.

The key outside markets today see the U.S. dollar index sharply lower. Nymex crude oil prices are higher and trading around $89.25 a barrel. The U.S. Treasury 10-year note yield is presently fetching around 3.9%.

Technically, the gold futures bears have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the October high of $1,738.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,622.20. First resistance is seen at today’s high of $1,688.90 and then at $1,700.00. First support is seen at today’s low of $1,648.30 and then at $1,635.00. Wyckoff's Market Rating: 2.0

The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at today’s high of $19.29 and then at Tuesday’s high of $19.725. Next support is seen at today’s low of $18.41 and then at $18.00. Wyckoff's Market Rating: 2.5.

December N.Y. copper closed up 205 points at 344.50 cents today. Prices closed nearer the session high today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 369.25 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at this week’s high of 347.70 cents and then at 350.00 cents. First support is seen at today’s low of 335.40 cents and then at 330.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips