Gold price powers to 2-mo. high on inflation concerns

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(Kitco News) -Gold and silver prices are modestly up in early U.S. trading Monday, with goldnotching a two-month high. It appears the metals traders have turned theirfocus from the bearish aspects of a tighter U.S. monetary policy, to thebullish prospects of rising and even problematic price inflation in the coming months.December gold was last up $2.60 at $1,819.40 and December Comex silver was lastup $0.173 at $24.33 an ounce.

Globalstock markets were mixed in overnight trading. The U.S. stock indexes are pointedto mixed openings when the New York day session begins. The U.S. indexes hitrecord highs last Friday. There remains little risk aversion in the globalmarketplace at present. The U.S. House of Representatives late Friday approveda pared-down U.S. government spending plan.

Inother weekend news, China reported its October imports were up 20.6%, year-on-year,which was less than expected. However, China's exports in the period werehigher than expected, at up 27.1%.

China'sCommunist Party has begun a four-day meeting at which President Xi Jinping isexpected to make a move to extend his rule indefinitely. Xi wants to extend hisambitious plans for the domestic economy and its global economic and geopoliticalpower.

Thekey outside markets today see the U.S. dollar index weaker after hitting a newhigh for the year last Friday. Nymex crude oil prices are higher and tradingaround $82.15 a barrel. The oil market bulls have become wobbly. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.481%.

U.S.economic data due for release Monday is light and includes the employment trendsindex.

Technically,December gold futures bulls have the overall near-term technical advantage andhave momentum. They have restarted a five-week-old uptrend on the daily barchart. Bulls' next upside price objective is to produce a close above solid resistanceat the September high of $1,836.90. Bears' next near-term downside price objectiveis pushing futures prices below solid technical support at the November low of $1,758.50.First resistance is seen at the overnight high of $1,823.00 and then at $1,830.00.First support is seen at the overnight low of $1.813.80 and then at $1,800.00.Wyckoff's Market Rating: 6.5.

The silver bulls and bears are back on a level overallnear-term technical playing field. Silver bulls' next upside price objective isclosing December futures prices above solid technical resistance at $25.00 anounce. The next downside price objective for the bears is closing prices below solidsupport at $22.50. First resistance is seen at $24.50 and then at $24.75. Next supportis seen at the overnight low of $24.13 and then at $24.00. Wyckoff's Market Rating:5.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com 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.

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