Modest gains for gold as stock markets still wobbly

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(Kitco News) - Gold pricesare a bit higher in midday U.S. trading Tuesday. It's been a choppy, two-sidedtrading session. The yellow metal is supported by some safe-haven demand amidworld energy supply concerns, but has also seen pressure from a higher U.S.dollar index and recently elevated bond yields. Decembergold futures were lastup $5.20 at $1,761.20. December Comexsilver was last down $0.095 at $22.57 anounce.

TheU.S. stock indexes are slightly up at midday but have also traded both sides ofunchanged so far today. Traders and investors are still a bit nervous asmid-October nears. On the front burner today are concerns about energy suppliesheading into the Northern Hemisphere's winter. Said Bloomberg in a morningemail dispatch: Shortages of coal and natural gas heading into winter areexpected to keep demand high. The latest pressure on energy supplies comes fromrecord thermal coal prices in China as key mining regions are hit by flooding.The high cost of power is already feeding through to metal prices, withaluminum rising to the highest since July of 2008.

Risinginflation, due in part to the increasing energy prices, is also making themarketplace uneasy. U.S. inflation reports are due out Wednesday and Thursdaymornings and will 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 firmer and not far belowits recent 12-month high. Nymex crude oil futures are near steady and tradingaround $80.50 a barrel. Meantime, the 10-year U.S. Treasury note yield ispresently fetching 1.598%.

Technically,December gold futures bears have the slight overall near-term technicaladvantage. Bulls' next upside price objective is to produce a close above solidresistance at $1,800.00. Bears' next near-term downside price objective ispushing futures prices below solid technical support at the September low of$1,721.10. First resistance is seen at today's high of $1,770.00 and then atlast week's high of $1,782.40. First support is seen at this week's low of$1,749.90 and then at last week's low of $1,745.40. Wyckoff's Market Rating:4.5

December silver futures bears have the firm overallnear-term technical advantage. Silver bulls' next upside price objective isclosing prices above solid technical resistance at $24.00 an ounce. The nextdownside price objective for the bears is closing prices below solid support atthe September low of $21.41. First resistance is seen at $23.00 and then atlast week's high of $23.22. Next support is seen at last week's low of $22.185and then at $22.00. Wyckoff's Market Rating: 2.5.

DecemberN.Y. copper closed down 275 points at 433.95 cents today. Prices closed nearmid-range today and hit a three-week high early on. The copper bulls have theoverall near-term technical advantage. Copper bulls' next upside priceobjective is pushing and closing prices above solid technical resistance at theSeptember high of 447.15 cents. The next downside price objective for the bearsis closing prices below solid technical support at 410.00 cents. Firstresistance is seen at today's high of 439.55 cents and then at 441.80 cents.First support is seen at today's low of 428.65 cents and then at this week'slow of 425.55 cents. 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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