Gold price up following weaker-than-expected U.S. GDP growth

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(Kitco News) - Gold pricesare moderately higher in early U.S. trading Thursday, in the wake of a U.S. GDPreport that was downbeat and which fell into the camp of the U.S. monetarypolicy doves, who want the Federal Reserve to hold off on tapering its monetarypolicy stimulus. Silver prices are trading near steady in early U.S. dealings.December gold was last up $4.40 at $1,803.00 and December Comex silver was lastdown $0.066 at $24.12 an ounce.

Thejust-released U.S. data point of the day saw the advance estimate forthird-quarter gross domestic product come in at up 2.0%, compared toexpectations of up 2.8%, year-on-year and a 6.7% growth reading in the secondquarter. The closely watched PCE price index was reported at up 5.3%, comparedto a rise of 6.5% in the second quarter. The weaker GDP data was somewhatoffset by the weekly U.S. jobless claims report that showed a decline.

Globalstock markets were mostly weaker in overnight trading. The U.S. stock indexesare pointed to slightly higher openings when the New York day session begins. Traderand investor attitudes are upbeat this week, as they choose to focus on positivecorporate earnings reports. For the moment the marketplace is brushing asideslowing economic growth in China, supply chain bottlenecks and rising inflationprospects.

TheEuropean Central Bank held its regular monetary policy meeting Thursday. Nochanges in ECB monetary policy were implemented and not were expected. The ECBdid say that its bond-buying program would continue until at least March of2022. In her press conference ECB President Christine Lagarde was expected to say the Euro zone remainstoo weak for policy makers to pull back stimulus. Meantime, Canada's central bankon Wednesday ended its quantitative easing program.

TheWorld Gold Council reported gold demand in the third quarter declined 7% comparedto Q3 2020. Outflows from gold-backed ETFs were the primary factor. Increasingjewelry demand did mitigate the slide in demand, said the WGC. Gold jewelrydemand grew 33%, year-on-year. Meantime, central banks purchased 69 metric tonsfor reserves vs 10 MT in same period in 2020.

Thekey outside markets today see the U.S. dollar index slightly higher. Crude oilprices are lower and trading around $81.65 a barrel. Meantime, the 10-year U.S.Treasury note yield is presently fetching 1.556%.

OtherU.S. economic data due for release Thursday includes pending home sales and theKansas City Fed manufacturing 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. Bulls' next upside priceobjective is to produce a close above solid resistance at the September high of$1,836.90. Bears' next near-term downside price objective is pushing futures pricesbelow solid technical support at $1,750.00. First resistance is seen at thisweek's high of $1,811.50 and then at the October high of $1,815.50. First supportis seen at today's low of $1,795.60 and then at this week's low of $1,783.00. Wyckoff'sMarket Rating: 6.5

The silver bulls have the overall near-term technicaladvantage. Prices are in a four-week-old uptrend on the daily bar chart. Silverbulls' next upside price objective is closing December futures prices above solidtechnical resistance at $25.00 an ounce. The next downside price objective forthe bears is closing prices below solid support at $23.00. First resistance is seenat Wednesday's high of $24.33 and then at this week's high of $24.695. Next supportis seen at this week's low of $23.905 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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