Price gains for gold, silver, on inflation worries, weaker greenback

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(Kitco News) - Gold and silver pricesarehigher in early U.S. trading Friday, supported by increasing worries aboutproblematic price inflation and by a lower U.S. dollar index to end the tradingweek. Friendly charts are also inviting speculators to the long side of goldand silver. December gold futures were last up $11.80 at $1,793.50. December Comexsilver was last up $0.205 at $24.375 an ounce.

Itappears the gold and silver markets have finally awakened to the fact globalinflation is rising and probably won't be just transitory. Gold prices havebeen trending higher since late-September and silver prices this week hit asix-week high. History shows hard assets like the precious metals become morein favor as an inflation hedge when consumer and producer prices are rising.

Globalstock markets were mixed to firmer in overnight trading. The U.S. stock indexesare pointed to mixed openings when the New York day session begins, with theS&P stock index futures poking to a new contract and record high overnight.Very upbeat corporate earnings reports have boosted trader and investor risksentiment the past couple weeks. For the moment it appears the marketplace haspushed to the back burner rising inflation and the prospect of major globaleconomies slowing down in their post-pandemic recoveries. Dow Jones Newswiresran a story this morning headlined, "Supply-chain bottlenecks crimp globalgrowth, boost inflation." The report said worsening supply chain constraintsaround the world and the record surge in the price of some raw materials "isdragging on the world economy, suggesting a slowdown this summer will extendthrough the end of this year."

Thekey outside markets today see the U.S. dollar index weaker. Crude oil pricesare higher and trading around $82.80 a barrel after hitting a seven-year high Thursday.Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.685%.

U.S.economic data due for release Friday includes the flash manufacturing andservices purchasing managers indexes.

Technically,December gold futures bulls have the overall near-term technical advantage asprices are trending higher on the daily chart. Bulls' next upside price objectiveis to produce a close above solid resistance at the October high of $1,801.90. Bears'next near-term downside price objective is pushing futures prices below solid technicalsupport at the September low of $1,721.10. First resistance is seen at today'shigh of $1,796.20 and then at $1,800.00. First support is seen at the overnightlow of $1,783.60 and then at $1,775.00. Wyckoff's Market Rating: 6.0

The silver bulls have the overall near-term technicaladvantage. Prices are in 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 this week's high of $24.55and then at the September high of $24.945. Next support is seen at theovernight low of $24.185 and then at $24.00. 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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