Gold Prices Pop As USDX Drops; U.S.-China Trade News Also Friendly

(Kitco News) - Gold pricesaresporting decent gains in early-afternoon U.S. trading Wednesday. The yellow metalwas under modest pressure overnight but prices started to move north as theU.S. dollar index moved south. There are also reports today the U.S. made anoverture to China to restart trade talks. Ideas the world's two largesteconomies may be moving closer to a trade agreement can be extrapolated to meanan eventual trade agreement would produce more U.S.-China commerce and in turnsee better demand for precious metals coming from China. December gold futureswere last up $7.10 an ounce at $1,209.30. December Comex silver was last up$0.117 at $14.265 an ounce.

Shortcovering in the gold and silver futures markets and perceived bargain-basementbuying in the cash markets were featured today.

Thekey U.S. economic report today saw the August producer price index come in atdown 0.1%, which was surprising as PPI was expected to be up 0.2% from July.That report did work to pressure the U.S. dollar index.

Traderswere awaiting the Federal Reserve's beige book to be released early thisafternoon.

OnThursday the European Central Bank meets and is expected to report it willcontinue to pull back from years of a very easy monetary policy. The Bank ofEngland also holds is regular monetary policy meeting Thursday.

Theother key outside market today finds Nymex crude oil prices higher and above$70.00 a barrel-and near the recent summertime highs. That's also bullish forthe precious metals.

Technically,December gold futures bears still have the firm overall near-term technicaladvantage. Gold bulls' next upside near-term price breakout objective is toproduce a close above solid technical resistance at $1,220.70. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at the August low of $1,167.10. First resistance is seen atlast week's high of $1,212.70 and then at $1,220.70. First support is seen at$1,200.00 and then at this week's low of $1,192.70. Wyckoff's Market Rating:3.0

Decembersilver futures bears have the solid overall near-term technical advantage.There are no early clues to suggest a market bottom is close at hand. Silverbulls' next upside price breakout objective is closing prices above solidtechnical resistance at $15.07 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at $13.50. Firstresistance is seen at $14.405 and then at $14.59. Next support is seen attoday's low of $14.105 and then at this week's low of $13.965. Wyckoff's MarketRating: 1.5.

DecemberN.Y. copper closed up 565 points at 267.80 cents today. Prices closed nearerthe session high today on short covering. The copper bears still have the firmoverall near-term technical advantage. However, more good gains this week wouldbegin to suggest a market bottom is in place. Copper bulls' next upside priceobjective is pushing and closing prices above solid technical resistance at theAugust high of 283.80 cents. The next downside price objective for the bears isclosing prices below solid technical support at the August low of 257.45 cents.First resistance is seen at today's high of 268.85 cents and then at 270.00cents. First support is seen at 265.00 cents and then at today's low of 260.65cents. Wyckoff's Market Rating: 2.0.

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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