Gold Near Steady Following Tame CPI Data; Silver Drops To Nearly 3-Year Low

(Kitco News) - Gold pricesare near unchanged and hovering just above $1,200.00 in early U.S. trading Wednesday.The silver market is slightly down and dipped to a nearly three-year lowovernight. Both metals showed minimal price reactions to just-released U.S.inflation data. December gold futures were last up $0.70 an ounce at $1,202.10.December Comex silver was last down $0.017 at $13.96 an ounce.

TheU.S. economic highlight of the day was the release of the Consumer Price Indexfor October, which came in at up 0.3%, which was right in line withexpectations. This report falls into thecamp of those believing U.S. inflation, while creeping up recently, is not yetproblematic.

Globalstock markets were mixed overnight. Asian shares were mixed to firmer andEuropean stock indexes were mostly lower. U.S. stock indexes are pointed towardslightly lower openings when the New York day session begins.

Thebig drop in crude oil prices has spooked the world marketplace. Nymex crude oil futures prices are near steady today, after careening to an 11-month low of$54.75 a barrel on Tuesday. In less than six weeks' time Nymex crude priceshave dropped by over $20 a barrel. The steep slide in oil prices is a bearishelement for most of the raw commodity sector, as oil is arguably the leader ofthat sector.

Europeaninvestors are unsettled at mid-week. Reports said U.K. Prime Minister TheresaMay has told her cabinet members to back her on her Brexit agenda, or quit. TheEuro currency fell to a 16-month low against the U.S. dollar on Monday. Italianbond yields rose to a three-week high today as the Italian government and EUofficials wrangle over the specifics of Italy's budget.

Inother overnight news, China's industrial output was reported up abetter-than-expected 5.9% in October, year-on-year. However, China's retailsales rose by 8.6% in October, which is down from a 9.2% pace in September,year-on-year.

Germany'sgross domestic product shrank 0.8% in the third quarter, for the slowest paceof growth for the leading European Union economy in over five years. Meantime,the Euro zone GDP was reported up 0.2% in the third quarter, and up 1.7%,year-on-year, which was in line with market expectations.

TheU.S. dollar index is trading firmer today and not far below this week's1.5-year high.

U.S.economic data due for release Wednesday includes the weekly MBA mortgageapplications survey, real earnings, the consumer price index. Fed ChairmanJerome Powell speaks at a Federal Reserve Board event in Dallas today.

Technically,gold bears have the firm overall near-term technical advantage, to suggest achallenge of the recent lows. Bulls' next upside price objective is to producea close in December futures above solid resistance at $1,225.00. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at the September low of $1,184.30. First resistance is seenat Tuesday's high of $1,205.50 and then at this week's high of $1,212.00. Firstsupport is seen at this week's low of $1,196.60 and then at $1,190.00.Wyckoff's Market Rating: 2.5

Decembersilver futures bears have the solid overall near-term technical advantage.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at $14.50 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at $13.50. Firstresistance is seen at this week's high of $14.18 and then at $14.425. Nextsupport is seen at the overnight low of $13.86 and then at $13.75. Wyckoff'sMarket Rating: 1.0.

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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