Gold, Silver Prices Pop On Safe-Haven Demand

(Kitco News) - Gold andsilver prices are solidly higher in early-afternoon U.S. trading Tuesday, onkeener risk aversion in the marketplace coming from the European Union. Goldprices hit a one-week high, while silver notched a four-week high. Gold andsilver bulls were especially encouraged by their metals' ability to rally todayin the face of a firmer U.S. dollar index that hit six-week high overnight. December gold futures were last up $15.60 an ounce at $1,207.30. December Comex silver was last up $0.208 at $14.71 an ounce.

Worldwideattention, especially in Europe, is on the new anti-establishment Italiangovernment's plans to deal with Italy's financial and economic problems. TheEuro currency slumped and gold prices rallied after a government official saidItaly would be better off with its own currency. The European Union has toapprove Italy's budget plan that many are saying won't pass muster with the EU.This matter appears to be escalating and could continue to pressure the Eurocurrency and provide more support to the safe-haven gold and silver markets.

Worldstock markets were mostly weaker overnight on the risk aversion that has creptback into the marketplace. However, the U.S. stock market rallied today as U.S.investors reckoned the Italy issue is not their problem-at least not yet.Chinese markets are closed until Friday for a public holiday.

Thekey other outside market today finds November Nymex crude oil prices slightlydown after hitting a four-year high overnight. Nymex prices are trading justabove $75.00 a barrel. The solid rally in the crude oil market is at the veryleast limiting some selling pressure in the precious metals markets, if noteven prompting some outright buying interest.

Technically,gold prices pushed back up into the recent trading range today, which nowsuggests a market bottom has indeed been put in place, at the August low. Thegold bears still have the overall near-term technical advantage. Gold bulls'next upside near-term price breakout objective is to produce a close abovesolid technical resistance at $1,220.70. Bears' next near-term downside pricebreakout objective is pushing prices below solid technical support at theAugust low of $1,167.10. First resistance is seen at today's high of $1,212.30and then at $1,220.70. First support is seen at $1,200.00 and then at today'slow of $1,192.20. Wyckoff's Market Rating: 3.0

Silverprices closed near mid-range today and hit a four-week high. Prices are in afledgling three-week-old uptrend on the daily bar chart. The silver bears stillhave the overall near-term technical advantage but recent price action suggestsa market bottom being in place. Silver bulls' next upside price breakoutobjective is closing December futures prices above solid technical resistanceat $15.07 an ounce. The next downside price breakout objective for the bears isclosing prices below solid support at the September low of $13.965. Firstresistance is seen at today's high of $14.95 and then at $15.07. Next supportis seen at today's low of $14.47 and then at this week's low of $14.395.Wyckoff's Market Rating: 3.5.

DecemberN.Y. copper closed up 185 points at 280.60 cents today. Prices closed nearmid-range again today. The copper bears have the overall near-term technicaladvantage, but recent good gains suggest a market bottom is in place. Also, abull flag pattern has formed on the daily bar chart. Copper bulls' next upsideprice objective is pushing and closing prices above solid technical resistanceat the 290.00 cents. The next downside price objective for the bears is closingprices below solid technical support at the August low of 257.45 cents. Firstresistance is seen at today's high of 285.25 cents and then at the Septemberhigh of 287.10 cents. First support is seen at this week's low of 275.55 centsand then at 272.00 cents. Wyckoff's Market Rating: 4.0.

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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