Gold Firmer As Bullish Technical Momentum Builds

(Kitco News) - Gold prices aremodestly up and not far below Monday’s 10-week high in early U.S. trading Tuesday.The near-term technical posture for the yellow metal has dramatically improvedthe past few sessions, which continues to invite the chart-based buyers. Also,the recent volatility in world stock markets and some heightened geopoliticaltensions are continuing to provide some demand for safe-haven gold. December gold futures were last up $1.80 an ounce at $1,232.50. December Comex silver waslast up $0.063 at $14.79 an ounce.

Globalstock markets were mixed overnight, with European stocks mostly up and Asianstocks mostly down. U.S. stock indexes are pointed toward firmer openings whenthe New York day session begins.

Europeanshares were lifted today by reports the new Italian government is more or lessfalling in line with European Union constricts, with the new Italian PrimeMinister saying Italy’s membership in the EU is “unrenounceable.”

Therift between the U.S. and Saudi Arabia regarding a missing Saudi journalist whomany think was killed by the Saudi Kingdom is still on the front burner of themarketplace. The U.S. Secretary of State is in Saudi Arabia talking to theking. President Trump over the weekend said there would be “severe punishment”of the Saudi Kingdom if it was determined it killed the journalist. Somereports are now saying a Saudi may admit to killing the journalist.

Inother overnight news, China’s consumer price index hit a seven-month high inSeptember-at up 0.7% from August and up 2.5%, year-on-year.

Theclosely watched German economic indicator, the ZEW index, dropped to -24.7 inOctober from -10.6 in September. ZEW officials said the steep drop is mostlydue to worries about world trade wars-especially the U.S. vs. China.

Ina sign of the wide spread between U.S. government and German government bondyields, the German government auctioned a two-year note today, which fetched anaverage yield of -0.56%. The U.S. two-year note is currently yielding 2.87%.

Thekey outside markets today find the U.S. dollar index slightly lower. Meantime,November Nymex crude oil prices lower and trading just above $71.00 a barrel.

U.S.economic data due for release Tuesday includes the weekly Goldman Sachs andJohnson Redbook retail sales reports, industrial production and capacityutilization, the NAHB housing index, and Treasury international capital data.The Treasury will also issue a report on world currency markets, but is notexpected to label China a currency manipulator.

Technically,gold price action last week produced a big and bullish upside “breakout” from asideways trading range on the daily bar chart. This suggests a market bottom isin place and that prices can trend sideways to higher for at least the nearterm. Gold bulls' next upside near-term price breakout objective is to producea close in December futures above solid resistance at $1,250.00. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at $1,200.00. First resistance is seen at Monday’s high of$1,236.90 and then at $1,240.00. First support is seen at the overnight low of$1,228.40 and then at Monday’s low of $1,220.40. Wyckoff's Market Rating: 6.0

Decembersilver futures bears still have the overall near-term technical advantage.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at $15.00 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at the Septemberlow of $13.965. First resistance is seen at the October high of $14.95 and thenat $15.00. Next support is seen at Monday’s low of $14.615 and then at lastweek’s low of $14.255. Wyckoff's Market Rating: 3.5.

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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