Gold sees corrective price pullback after recent gains

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(Kitco News) - Gold and silver prices are lower in early U.S. trading Thursday, on routine downside price corrections after recent gains that saw the gold market hit a six-month high this week and silver an eight-month peak. February gold was last down $12.10 at $1,846.00 and March silver was down $0.444 at $23.51.

The just-released U.S. ADP national employment report came in at up 235,000 jobs in December, compared to the consensus forecast of up 153,000. The gold market saw prices downtick a bit more following the stronger-than-expected data. Traders and investors are now focusing on Friday morning’s U.S. December employment situation report from the Labor Department. The key non-farm payrolls number is expected to come in at up 200,000, following a rise of 263,000 in the November report.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Risk appetite is not keen this week due to worries about a global economic slowdown in 2023. In the coming weeks, keep a closer eye on the crude oil market, as its price trajectory will give the marketplace a very good reading on the global economic growth prospects in 2023. Nymex crude oil prices are higher early today and trading around $74.50 a barrel. However, oil’s price drop the first two trading days of the new year was the steepest, percentage-wise, in over 30 years--suggesting dour prospects for any robust world economic growth this year.

In overnight news, the Euro zone producer price index for November came in at up 27.1%, year-on-year, mostly due to rising energy costs. However, excluding energy, the PPI was still up 13.1% on the year.

The other key outside market today sees the U.S. dollar index slightly higher. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently around 3.7%.  

It’s a busy day for U.S. economic data releases Thursday, including the weekly jobless claims report, the Challenger job-cuts report, the ADP national employment report, the U.S. services purchasing managers index (PMI), the weekly DOE liquid energy stocks report, the global services PMI and the monthly retail chain store sales index.

Technically, the gold futures bulls have the solid overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at today’s high of $1,864.30 and then at this week’s high of $1,871.30. First support is seen at Wednesday’s low of $1,842.00 and then at this week’s low of $1,831.30. Wyckoff's Market Rating: 8.0

The silver bulls have the overall near-term technical advantage but are fading a bit this week. A choppy, four-month-old uptrend is still 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 $24.50. Next support is seen at today’s low of $23.345 and then at $23.00. Wyckoff's Market Rating: 6.5.