Gold firmer, hits 2-mo. high, as U.S. inflation report not tame

(Kitco News) - Gold prices are modestly higher and hit another two-month high in midday dealings Tuesday. The yellow metal bulls are touting a U.S. inflation report that did not tamp down worries about rising prices. December gold was last up $3.80 at $1,831.70 and December Comex silver was last down $0.257 at $24.29 an ounce.

The U.S. data point of the day Tuesday saw the producer price index report for October come in at up 0.6%, which was in line with market expectations. Year-on-year, the October PPI was up 8.6%. The September report showed a rise of 0.5%. While in line with forecasts, today’s U.S. PPI report certainly does not alleviate any concerns about rising inflationary pressures. The gold market erased modest early losses and pushed to mildly higher price levels on the day, in the aftermath of the report. As I reported Monday, it appears metals traders are now focusing more on the bullish aspects of rising inflation, and less on the Federal Reserve’s monetary policy—at least for now.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are lower at midday, as it also appears stock market bulls are a bit more worried about inflation. Still,
there remains little overall risk aversion in the global marketplace at present. Recent positive news on the Covid-19 front—falling infection rates in the U.S. and new, powerful drugs to combat the virus—have contributed to the upbeat marketplace attitudes.

In other news, Bitcoin prices rose to another record high near $68,000.

The key outside markets today see the U.S. dollar index a bit weaker. The USDX last week hit a new high for the year. Nymex crude oil prices are higher and trading around $82.65 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.431%. 

Technically, December gold futures prices hit another two-month high today. Bulls have the overall near-term technical advantage amid a five-week-old uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $1,839.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,758.50. First resistance is seen at the September high of $1,836.90 and then at $1,839.00. First support is seen at today’s low of $1,821.00 and then at this week’s low of $1,813.80. Wyckoff's Market Rating: 6.5.

December silver futures bulls and bears are on a level overall near-term technical playing field. 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 $23.00. First resistance is seen at this week’s high of $24.59 and then at the September high of $24.945. Next support is seen at today’s low of $24.09 and then at $24.00. Wyckoff's Market Rating: 5.0.