Gold price sharply down after hotter U.S. inflation data

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(Kitco News) - Gold pricesare sharply lower and headed for a bearish weekly low close in early U.S.trading Friday. U.S. inflation data that came in hot, rising U.S. Treasuryyields and a rebound in the U.S. dollar index on this day are all workingagainst the precious metals markets bulls. December gold was last down $24.10 at$1,778.00 and December Comex silver was last down $0.27 at $23.85 an ounce.

Thejust-released U.S. third-quarter employment cost index report showed a rise of1.3%, which was above the consensus forecast of up 0.9%. The closely watched PCEprice index was reported up 0.3% from August and was up 4.4%, year-on-year.This data fall into the camp of the U.S. monetary policy hawks, who want to seethe Federal Reserve tighten its monetary policy sooner rather than later. Thatrallied the U.S. dollar index and helped to push Treasury yields north.

Globalstock markets were mixed but mostly down in overnight trading. The U.S. stock indexesare pointed to weaker openings when the New York day session begins. Riskappetite has been dented a bit late this week after quarterly results from behemothsAmazon and Apple showed these companies are starting to be crimped by supply-chainconstraints.

Inovernight news, the Euro zone reported its October consumer price index at up 4.1%,year-on-year, compared to a reading of up 3.4% in the September report. TheOctober number was the hottest since 2008.

Themarketplace will monitor this weekend's G-20 meeting in Rome.

Theother key outside market today sees crude oil prices weaker and trading around$82.30 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching1.612%.

OtherU.S. economic data due for release Friday includes the Chicago ISM businesssurvey, and the University of Michigan consumer sentiment survey.

Technically,December gold futures bulls have the overall near-term technical advantage asprices are in a four-week-old uptrend on the daily chart. However, the bullsneed to show fresh power soon to keep the price uptrend alive. Bulls' next upsideprice objective is to produce a close above solid resistance at the September highof $1,836.90. Bears' next near-term downside price objective is pushing futuresprices below solid technical support at $1,750.00. First resistance is seen at $1,790.00and then at $1,800.00. First support is seen at today's low of $1,776.20 andthen at $1,760.00. Wyckoff's Market Rating: 6.0

The silver bulls have the overall near-term technicaladvantage. Prices are in a four-week-old uptrend on the daily bar chart, butthe bulls need to show fresh power soon to keep it alive. Silver bulls' next upsideprice objective is closing December futures prices above solid technical resistanceat $25.00 an ounce. The next downside price objective for the bears is closingprices below solid support at $23.00. First resistance is seen at today's highof $24.14 and then at this week's high of $24.695. Next support is seen attoday's low of $23.76 and then at $23.615. Wyckoff's Market Rating: 6.0.

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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