(Kitco News) - Gold and silver prices are sharply higher in midday U.S. trading, with gold scoring a three-week high and silver a three-month high. Bulls showed important follow-through buying strength Tuesday, after Monday’s solid gains, to suggest still more upside for both metals in the near term. December gold was last up $32.40 at $1,734.60 and December silver was up $0.606 at $21.195.
Trading so far this week sees a sharply lower U.S. dollar index, rallying crude oil prices, falling U.S. Treasury yields and safe-haven demand—a fully fundamental bullish cocktail for the two precious metals. The near-term chart postures have also markedly improved for gold and silver.
Global stock markets were mostly firmer overnight. Markets in China and Hong Kong were closed for a holiday Tuesday. U.S. stock indexes are solidly higher at midday, on follow-through strength from the solid gains posted Monday. Risk appetite has at least temporarily up-ticked early this week, after weaker purchasing managers indexes (PMIs) from major economies, including the U.S., on Monday led to notions (probably premature) that the major central banks will start to decelerate their monetary policy tightening paces. Australia’s central bank on Tuesday raised its main interest rate by only 0.25%, following its last hike of 0.5%.
In a reminder of the global inflation problem, the Euro zone today reported its producer price index in August was up 43.3%, year-on-year, mainly due to soaring energy costs. However, excluding energy, the zone’s August PPI was still up 14.5% from last year.
The key outside markets today see the U.S. dollar index solidly lower on follow-through pressure from Monday’s losses. Nymex crude oil prices are higher and trading around $84.70 a barrel.
The most important U.S. data point of the week, if not the month, is Friday’s employment situation report for September from the Labor Department. The key non-farm jobs number is expected to come in at up 275,000. The August report showed a non-farm jobs rise of 315,000.