Gold price sharply down after surprisingly strong U.S. retail sales

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(Kitco News) - Gold pricesare sharply lower in early U.S. trading Friday and extended early lossesfollowing a very upbeat U.S. retail sales report that falls squarely into thecamp of the U.S. monetary policy hawks, who want to see U.S. monetary policy tightenedsooner rather than later. December gold futures were last down $23.20 at $1,774.70.December Comex silver was last down $0.272 at $23.21 an ounce.

Thekey U.S. data point Friday is the monthly retail sales report for September,which came in at up 0.7% versus the consensus forecast of down 0.2% from August.The August report was also revised up, to a 0.9% gain from the original figureof up 0.7%.

Globalstock markets were mostly higher in overnight trading. The U.S. stock indexesare pointed to higher openings when the New York day session begins. The stockindex bulls have gained strength late this week, amid corporate earningsreports that have been generally upbeat.

Tradersand investors have been watching developments on raw commodity/supply chainfront. Winter is approaching in the Northern Hemisphere and some countries areworried about securing adequate energy supplies. The U.S. government has implemented24-hour-a-day work shifts at major West Coast U.S. ports. And raw materialprices are rising rapidly, with copper prices on the London Metal Exchangerising over 7% just this week. All of the above are likely to add toinflationary price pressures that could become problematic down the road. Sucha scenario would be bullish for the metals markets.

TheU.S. Securities and Exchange Commission appears ready to allow the first U.S.Bitcoin futures exchange-traded fund to begin trading. That helped push Bitcointo within striking distance of $60,000 Friday.

Thekey outside markets today see the U.S. dollar index higher. Nymex crude oil futuresare higher, hit a seven-year high and trading around $82.00 a barrel. Meantime,the 10-year U.S. Treasury note yield is presently fetching around 1.547%.

OtherU.S. economic data due for release Friday includes the Empire Statemanufacturing survey, import and export prices, manufacturing and tradeinventories and the University of Michigan consumer sentiment survey.

Technically,December gold futures bulls have the slight overall near-term technicaladvantage as prices are trending higher on the daily chart. Bulls' next upsideprice objective is to produce a close above solid resistance at the Septemberhigh of $1,836.90. Bears' next near-term downside price objective is pushing futuresprices below solid technical support at this week's low of $1,749.90. First resistanceis seen at the overnight high of $1,797.70 and then at this week's high of $1,801.90.First support is seen at today's low of $1,770.30 and then at $1,757.90. Wyckoff'sMarket Rating: 5.5

The silver bears have the overall near-term technicaladvantage. However, bulls are working on a fledgling price uptrend. Silver bulls'next upside price objective is closing December futures prices above solid technicalresistance at $24.00 an ounce. The next downside price objective for the bears isclosing prices below solid support at $22.00. First resistance is seen at theovernight high of $23.645 and then at $24.00. Next support is seen at Thursday'slow of $22.925 and then at $22.50. 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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