Gold price steady-weak amid firmer USDX, U.S. stock indexes

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(Kitco News) - Gold pricesare steady to slightly lower in early U.S. trading Tuesday, giving up modestovernight gains as the U.S. dollar index has moved to its daily high and theU.S. stock indexes have done the same. December gold futures were last down $1.20at $1,754.50. December Comex silver was last down $0.26 at $22.395 an ounce.

Globalstock markets were mixed but mostly lower in overnight trading. The U.S. stock indexesare pointed to slightly higher openings when the New York day session begins. Tradersand investors are still a bit nervous as mid-October nears. On the front burnertoday are concerns about energy supplies heading into the Northern Hemisphere'swinter. Said Bloomberg in a morning email dispatch: Shortages of coal andnatural gas heading into winter are expected to keep demand high. The latestpressure on energy supplies comes from record thermal coal prices in China askey mining regions are hit by flooding. The high cost of power is alreadyfeeding through to metal prices, with aluminum rising to the highest since Julyof 2008.

Risinginflation, due in part to the increasing energy prices, is also making the marketplaceuneasy. U.S. inflation reports are due out Wednesday and Thursday mornings andwill be closely scrutinized.

Thetroubled Chinese property Giant, Evergrande, reportedly missed another big debtpayment and traders are increasingly worried about a contagion effect.

Inother overnight news, Germany's closely watched ZEW economic conditions indexfor October was downbeat, showing a "current conditions” reading of 21.6 versus31.9 in September.

Thekey outside markets today see the U.S. dollar index near steady. Nymex crudeoil futures are slightly up after hitting a seven-year high Monday, and aretrading around $80.75 a barrel. Meantime, the 10-year U.S. Treasury note yieldis presently fetching 1.598%.

U.S.economic data due for release Tuesday includes the NFIB small business index,the weekly Johnson Redbook and chain store sales reports. The InternationalMonetary Fund world economic outlook is issued today.

Technically,December gold futures bears still have the slight overall near-term technical advantage.However, a four-week-old downtrend on the daily bar chart has been negated. Bulls'next upside price objective is to produce a close above solid resistance at $1,800.00.Bears' next near-term downside price objective is pushing futures prices belowsolid technical support at the September low of $1,721.10. First resistance is seenat the overnight high of $1,765.60 and then at $1,771.50. First support is seenat $1,750.00 and then at last week's low of $1,745.40. Wyckoff's Market Rating:4.5

The silver bears have the firm overall near-term technicaladvantage. Silver bulls' next upside price objective is closing December futuresprices above solid technical resistance at $24.00 an ounce. The next downsideprice objective for the bears is closing prices below solid support at theSeptember low of $21.41. First resistance is seen at Monday's high of $22.83 andthen at $23.00. Next support is seen at $22.25 and then at $22.00. Wyckoff's MarketRating: 2.5.

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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