(Kitco News) – Gold prices are near unchanged and hovering just above $1,200.00 in early U.S. trading Wednesday. The silver market is slightly down and dipped to a nearly three-year low overnight. Both metals showed minimal price reactions to just-released U.S. inflation data. December gold futures were last up $0.70 an ounce at $1,202.10. December Comex silver was last down $0.017 at $13.96 an ounce.
The U.S. economic highlight of the day was the release of the Consumer Price Index for October, which came in at up 0.3%, which was right in line with expectations. This report falls into the camp of those believing U.S. inflation, while creeping up recently, is not yet problematic.
Global stock markets were mixed overnight. Asian shares were mixed to firmer and European stock indexes were mostly lower. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
The big drop in crude oil prices has spooked the world marketplace. Nymex crude oil futures prices are near steady today, after careening to an 11-month low of $54.75 a barrel on Tuesday. In less than six weeks’ time Nymex crude prices have dropped by over $20 a barrel. The steep slide in oil prices is a bearish element for most of the raw commodity sector, as oil is arguably the leader of that sector.
European investors are unsettled at mid-week. Reports said U.K. Prime Minister Theresa May has told her cabinet members to back her on her Brexit agenda, or quit. The Euro currency fell to a 16-month low against the U.S. dollar on Monday. Italian bond yields rose to a three-week high today as the Italian government and EU officials wrangle over the specifics of Italy’s budget.
In other overnight news, China’s industrial output was reported up a better-than-expected 5.9% in October, year-on-year. However, China’s retail sales rose by 8.6% in October, which is down from a 9.2% pace in September, year-on-year.
Germany’s gross domestic product shrank 0.8% in the third quarter, for the slowest pace of growth for the leading European Union economy in over five years. Meantime, the Euro zone GDP was reported up 0.2% in the third quarter, and up 1.7%, year-on-year, which was in line with market expectations.
The U.S. dollar index is trading firmer today and not far below this week’s 1.5-year high.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, the consumer price index. Fed Chairman Jerome Powell speaks at a Federal Reserve Board event in Dallas today.
Technically, gold bears have the firm overall near-term technical advantage, to suggest a challenge of the recent lows. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,225.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the September low of $1,184.30. First resistance is seen at Tuesday’s high of $1,205.50 and then at this week’s high of $1,212.00. First support is seen at this week’s low of $1,196.60 and then at $1,190.00. Wyckoff’s Market Rating: 2.5
December silver futures bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $14.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at this week’s high of $14.18 and then at $14.425. Next support is seen at the overnight low of $13.86 and then at $13.75. Wyckoff’s Market Rating: 1.0.
By Jim Wyckoff
For Kitco News