(Kitco News) - Gold and silver prices are sharply lower in early U.S. trading Thursday, on profit-taking pressure from the shorter-term futures traders, after recent gains. A still-hawkish U.S. central bank also has the precious metals bulls in hiding today. February gold was last down $33.90 at $1,784.60 and March silver was down $0.826 at $23.30.
A hawkish Federal Reserve has traders and investors in a"risk-off" stance Thursday. Said market analyst Craig Erlam of OANDA: "Safe to say, investors simply didn't see that (the still-hawkish Fed rhetoric) coming. Two months of better-than-expected U.S. inflation data were enough to convince investors that the Fed would not only ease off the brake but signal it would do so more in the coming months. Whether through complacency or a desperate desire to see value in equity markets, investors overlooked the concerns that have plagued the U.S. central bank for months: The fear of entrenched inflation has been a much greater concern" for the Fed."Higher for longer" is the marketplace takeaway from this week"s FOMC meeting—meaning higher interest rates for a longer period of time—to ensure the Fed tamps down hard on inflation.
Global stock markets were lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins.
The European Central Bank and the Bank of England monetary policy meetings on Thursday saw both the BOE and ECB raise their main interest rate by 0.5%. That follows the U.S. Federal Reserve"s half-point rate hike. The central banks of Switzerland and Norway also raised their interest rates Thursday but also in smaller increments of policy tightening.
China and its fight against Covid remains near the front burner of the marketplace. Broker SP Angel this morning said in an email dispatch there is increasing evidence that China is now"allowing Covid to rip through the population." There is relatively little vaccination and almost no effective vaccination against Omicron in China."That means the virus will bypass most of the Covid controls left in place." The Wall Street Journal said today that"China"s economy took a big hit in November" due to strict Covid lockdown policies.
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The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are near steady trading around $77.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.484%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Empire State manufacturing survey, the Philadelphia Fed business survey, retail sales, industrial production and capacity utilization, manufacturing and trade inventories, Treasury international capital data and the ISM semi-annual report on business and the economy.
![Live 24 hours gold chart [Kitco Inc.]](/images/live/gold.gif?0.2924175530478188){kind=small}
Technically, the gold futures bulls have the overall near-term technical advantage but are now fading a bit. Prices are still in a five-week-old uptrend on the daily bar chart—but just barely. Bulls" next upside price objective is to produce a close in February futures above solid resistance at this week"s 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 $1,800.00 and then at today"s high of $1,819.70. First support is seen at $1,778.10 and then at $1,770.00. Wyckoff's Market Rating: 6.0
![Live 24 hours silver chart [ Kitco Inc. ]](/images/live/silver.gif)
The silver bulls have the firm overall near-term technical advantage. A choppy, three-month-old uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.00 and then at this week"s high of $24.39. Next support is seen at today"s low of $23.155 and then at $23.00. Wyckoff's Market Rating: 6.5.
