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Gold, Silver See Some Normal Profit Taking

Kitco News

(Kitco News) - Gold and silver prices are trading moderately lower in early U.S. trading Thursday. The profit-taking pressure seen in the precious metals is not unexpected as gold hit a 3.5-month high Wednesday, while silver prices scored a five-week high. February Comex gold was last down $5.00 an ounce at $1,313.40. March Comex silver was last down $0.107 at $17.16 an ounce.

The just-released ADP national employment report for December showed a rise of 250,000, which was significantly higher than the increase of 195,000 that was expected. Gold and silver prices down-ticked on the news.

Traders and investors are looking ahead to Friday’s U.S. employment report from the Labor Department. This report is arguably the most important U.S. data point of the month. The key December non-farm payrolls number is forecast to come in at up 180,000. 

World stock markets were mostly firmer overnight. There was some upbeat economic data from China released Thursday, to help boost world equity markets. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. indexes hit new record highs overnight. The rallying world stock markets are a bearish element for the competing asset class of precious metals.

Gold prices sold off Wednesday afternoon, right after the release of the minutes of the last Federal Open Market Committee (FOMC) meeting held on Dec. 12-13 saw the marketplace deem the minutes as favoring the hawkish camp on U.S. monetary policy. The FOMC members are still seeking a gradual rise in U.S. interest rates, with some members saying the new U.S. tax policy could raise GDP.

Tensions in Iran are still not far from the front burner of the market place. This matter is supporting some safe-haven gold and silver markets, as well as boosting the crude oil market.

The key outside markets on Thursday morning find the U.S. dollar index lower. Meantime, Nymex crude oil prices are slightly higher and hit a three-year high above $62.00 a barrel overnight.

Other U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the U.S. services PMI, the global services PMI, monthly U.S. chain store sales data, and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures bulls have the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. Bulls’ next upside technical objective is pushing and closing prices above chart resistance at $1,350.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,280.00. First support is seen at today’s low of $1,307.10 and then at this week’s low of $1,304.60. First resistance is seen at today’s high of $1,315.50 and then at $1,320.00. Wyckoff’s Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver bulls have the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. The next upside price breakout objective is closing futures prices above solid technical resistance at the October high of $17.59 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the October low of $16.435. First resistance is seen at this week’s high of $17.265 and then at $17.37. Next support is seen at $17.00 and then at last Friday’s low of $16.865. Wyckoff's Market Rating: 6.0.

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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