Gold Prices Gain As U.S. Dollar Rally Pauses

(Kitco News) - Gold pricesare moderately higher in early U.S. trading Tuesday, supported in part by theU.S. dollar index backing down from the 16-month high scored last week. Lookfor a quieter trading session in the metals and in many other markets, astraders and investors await the outcome of the U.S. mid-term elections. Decembergold futures were last up $3.70 an ounce at $1,236.00. December Comex silverwas last up $0.013 at $14.655 an ounce.

Globalstock markets were mixed to weaker overnight. U.S. stock indexes are pointedtoward slightly lower openings when the New York day session begins.

Focusof the world marketplace is on today's U.S. mid-term elections, which manybelieve are a referendum on the performance of President Trump. Big gains bythe Democrats would likely be bearish for the U.S. stock market and wouldsignal gridlock in Congress the next two years.

Inovernight news, the European Union reported a hotter reading on its inflationtoday. The Euro zone September producer price index came in at up 0.5% fromAugust and up 4.5%, year-on-year.

OnWednesday and Thursday the Federal Reserve's Open Market Committee (FOMC) meetsto discuss U.S. monetary policy, with a statement due Thursday afternoon. Nochange in interest rates is expected at this meeting.

U.S.economic data due for release Tuesday includes the weekly Goldman Sachs andJohnson Redbook retail sales reports, and the global services PMI.

Technically,gold bulls and bears are on a level overall near-term technical playing field.Bulls' next upside price objective is to produce a close in December futuresabove solid resistance at the October high of $1,246.00. Bears' next near-termdownside price breakout objective is pushing prices below solid technicalsupport at $1,200.00. First resistance is seen at last week's high of $1,239.30and then at $1,246.00. First support is seen at Monday's low of $1,228.40 andthen at $1,220.00. Wyckoff's Market Rating: 5.0

Decembersilver futures bears have the overall near-term technical advantage. However,recent price action suggests a market bottom is in place. Silver bulls' nextupside price breakout objective is closing prices above solid technicalresistance at $15.00 an ounce. The next downside price breakout objective forthe bears is closing prices below solid support at the September low of $13.965.First resistance is seen at $14.95 and then at $15.00. Next support is seen at $14.50and then at last week's low of $14.24. Wyckoff's Market Rating: 3.0.

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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