Gold price powers to 4-week high on chart-based buying, weaker greenback

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(Kitco News) - Gold and silver prices areposting strong gains in midday U.S. trading Wednesday, with both metals hittingfour-week highs. Buy stop orders were hit in the futures markets for the metalsafter key technical resistance levels were penetrated on the upside. A sell offin the U.S. dollar index today also worked in favor of the precious metalsmarket bulls. December gold futures were last up $35.90 at $1,795.00. DecemberComex silver was last up $0.646 at $23.16 an ounce.

Thefocus of the marketplace at mid-week was on the U.S. consumer price indexreport for September, which came in at up 0.4% from August and up 5.4%,year-on-year. The numbers were
expectedup 0.3% from August and up 5.3% year-on-year. Today's slightly warmer CPI dataarguably landed in the camp of the U.S. monetary policy hawks, who want to seethe Federal Reserve tighten its monetary policy sooner rather than later. TheU.S. dollar index gained some ground after the CPI report was released but isstill trading slightly down on the day. Rising energy costs and supply-chainbottlenecks in recent weeks have traders and investors even more keenly focusedon inflation prospects in the months ahead. The Federal Reserve will closelyscrutinize today's CPI data as it mulls the timing of tapering its monthlygovernment bond purchases (quantitative easing).

TheU.S. stock indexes are mixed at midday. The recent wobbly nature of the U.S.stock indexes is also prompting a bit of safe-haven buying in gold and silvermarkets.

TradersWednesday afternoon will closely examine the minutes of the last FOMC meetingof the Federal Reserve.

Technically,gold bulls have gained the slight overall near-term technical advantage. Pricesare now in a fledgling uptrend on the daily bar chart. Bulls' next upside priceobjective is to produce a close above solid resistance at $1,800.00. Bears'next near-term downside price objective is pushing futures prices below solidtechnical support at the September low of $1,721.10. First resistance is seenat today's high of $1,797.40 and then at $1,800.00. First support is seen at$1,782.40 and then at $1,770.00. Wyckoff's Market Rating: 5.5

December silver futures bears still have the overallnear-term technical advantage. However, more gains this week would start aprice uptrend on the daily chart and would also suggest that a market bottom isin place. Silver bulls' next upside price objective is closing prices abovesolid technical resistance at $24.00 an ounce. The next downside priceobjective for the bears is closing prices below solid support at the Septemberlow of $21.41. First resistance is seen at today's high of $23.285 and then at$23.50. Next support is seen at $22.75 and then at today's low of $22.48.Wyckoff's Market Rating: 3.5.

DecemberN.Y. copper closed up 1,910 points at 451.70 cents today. Prices closed nearthe session high today and hit a 10-week high. The copper bulls have theoverall near-term technical advantage and gained more power today. Copperbulls' next upside price objective is pushing and closing prices above solidtechnical resistance at the July high of 458.60 cents. The next downside priceobjective for the bears is closing prices below solid technical support at425.00 cents. First resistance is seen at today's high of 452.45 cents and thenat 458.60 cents. First support is seen at 445.00 cents and then at 440.00cents. Wyckoff's Market Rating: 6.5.

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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