(Kitco News) - Gold and silver prices are solidly lower in early U.S. trading Thursday, in the wake of results from the latest FOMC meeting of the Federal Reserve that were a bit hawkish on U.S. monetary policy. April gold was last down $19.20 at $2,048.10. March silver was last down $0.459 at $22.70.
The marketplace has mostly digested the Open Market Committee meeting of the Federal Reserve that concluded Wednesday afternoon. The FOMC left interest rates unchanged, as expected, but the statement said any rate cuts will not come until the Fed has “greater confidence” annual inflation is moving toward 2%. The statement also said the U.S. economy is expanding at a “solid” pace. Traders deemed the statement as leaning a bit hawkish. The monetary policy doves were hoping for a March FOMC rate cut, but now the earliest rate cut is seen by many as coming in June.
Traders are now focusing on Friday morning’s monthly U.S. jobs report from the Labor Department. The January non-farm payrolls component of the report is expected to show a rise of 175,000, compared to a gain of 216,000 in the December report.
Asian and European stock markets were mixed to weaker in overnight trading. U.S. stock index futures are set to open firmer when the New York day session begins.
In overnight news, the Eurozone consumer price index for January came in at up 2.8%, year-on-year versus the December reading of up 2.9% and forecasts for up 2.7%. Reads a Dow Jones Newswire headline today: “Eurozone inflation falls less than expected, pushing back ECB rate-cut prospects.”
The Eurozone January manufacturing purchasing managers index (PMI) came in at 46.6 versus 44.4 in the December report. A reading below 50.0 suggests contraction in the sector.
Sweden’s central bank, the Riksbank, held its main interest rate steady at 4.0% and said contractionary monetary policy is still needed to stabilize inflation closer to its target rate.
The Bank of England today left its monetary policy unchanged, keeping its main interest rate at 5.25%.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are slightly firmer and trading around $76.00 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 3.942%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, the U.S. manufacturing PMI, the ISM report on business manufacturing, construction spending, the global manufacturing PMI, and domestic auto industry sales.
Technically, the gold futures bulls have the slight overall near-term technical advantage but have faded. Prices are in a two-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at the overnight high of $2,067.00 and then at this week’s high $2,074.60. First support is seen at this week’s low of $2,037.70 and then at the January low of $2,023.30. Wyckoff's Market Rating: 5.5.
The silver bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at $23.72. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at $23.00 and then at this week’s high of $23.445. Next support is seen at $22.50 and then at $22.25. Wyckoff's Market Rating: 3.5.
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