Gold, silver see solid price gains as USDX drops

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(Kitco News) - Gold and silver pricessolidly higher in early U.S. trading Tuesday, with silver notching a four-weekhigh. A drop in the U.S. dollar index on this day and more bullish near-termchart postures for both metals are inviting buyers to step up. December goldfutures were last up $16.80 at $1,782.10. December Comex silver was last up $0.681at $23.945 an ounce.

Globalstock markets were mostly higher in overnight trading. The U.S. stock indexesare pointed to higher openings when the New York day session begins.

Stillnear the front burner of the marketplace is the global supplies shortage andtransportation bottlenecks that have many of those supplies' prices rising,including energy. Many industrial metals prices are soaring, including copper,aluminum and magnesium. Nymex crude oil prices are higher and hit a seven-yearhigh of $83.58 a barrel overnight. Natural gas prices are also at very elevatedlevels. As winter approaches in the Northern Hemisphere, amid the rising energycosts and worries in some countries about securing winter heating needs, itseems "Murphy's law" will almost certainly come into play: a much harsher-than-normalwinter for many countries in the Northern Hemisphere.

Theother key outside market today sees the U.S. dollar index solidly lower and hittinga three-week low. Meantime, the 10-year U.S. Treasury note yield is presentlyfetching 1.597%. For perspective, the U.K. 10-year gilt yield is presently1.135% and the German 10-year bund yield is at -0.144%.

U.S.economic data due for release Tuesday includes the weekly chain store andJohnson Redbook retail reports, and new residential construction.

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 Octoberhigh of $1,801.90. Bears' next near-term downside price objective is pushing futuresprices below solid technical support at the September low of $1,721.10. First resistanceis seen at $1,788.40 and then at $1,800.00. First support is seen at $1,775.00and then at today's low of $1,763.40. Wyckoff's Market Rating: 5.5

The silver bulls have gained the overall near-term technicaladvantage. Prices are is a three-week-old uptrend. Silver bulls' next upside priceobjective is closing December futures prices above solid technical resistance at$25.00 an ounce. The next downside price objective for the bears is closing pricesbelow solid support at $22.50. First resistance is seen at $24.00 and then at $24.25.Next support is seen at $23.645 and then at $23.50. Wyckoff's Market Rating: 5.5.

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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