Gold price sharply down after hotter U.S. inflation data

New York (Oct 29)  Gold prices are sharply lower and headed for a bearish weekly low close in early U.S. trading Friday. U.S. inflation data that came in hot, rising U.S. Treasury yields and a rebound in the U.S. dollar index on this day are all working against the precious metals markets bulls. December gold was last down $24.10 at $1,778.00 and December Comex silver was last down $0.27 at $23.85 an ounce.

The just-released U.S. third-quarter employment cost index report showed a rise of 1.3%, which was above the consensus forecast of up 0.9%. The closely watched PCE price index was reported up 0.3% from August and was up 4.4%, year-on-year. This data fall into the camp of the U.S. monetary policy hawks, who want to see the Federal Reserve tighten its monetary policy sooner rather than later. That rallied the U.S. dollar index and helped to push Treasury yields north.

Global stock markets were mixed but mostly down in overnight trading. The U.S. stock indexes are pointed to weaker openings when the New York day session begins. Risk appetite has been dented a bit late this week after quarterly results from behemoths Amazon and Apple showed these companies are starting to be crimped by supply-chain constraints.

In overnight news, the Euro zone reported its October consumer price index at up 4.1%, year-on-year, compared to a reading of up 3.4% in the September report. The October number was the hottest since 2008.

The marketplace will monitor this weekend’s G-20 meeting in Rome.

The other key outside market today sees crude oil prices weaker and trading around $82.30 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.612%.  

Other U.S. economic data due for release Friday includes the Chicago ISM business survey, and the University of Michigan consumer sentiment survey.

Technically, December gold futures bulls have the overall near-term technical advantage as prices are in a four-week-old uptrend on the daily chart. However, the bulls need to show fresh power soon to keep the price uptrend alive. Bulls’ next upside price objective is to produce a close above solid resistance at the September high of $1,836.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at $1,790.00 and then at $1,800.00. First support is seen at today’s low of $1,776.20 and then at $1,760.00.

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