(Kitco News) - Gold and silver prices are lower in early U.S. trading Thursday, on more profit taking from the shorter-term futures traders after gold hit a record high and silver a 14-year high on Tuesday. Both markets were due for downside price corrections. December gold was last down $16.60 at $3,701.30. December silver prices were down $0.042 at $42.11.
Global stocks were mostly firmer overnight. U.S. stock indexes are pointed to higher openings and record highs when the New York day session begins.
The Federal Reserve’s FOMC cut its fed funds trading range by a quarter-point, to 4.00 to 4.25%, Wednesday afternoon, as widely expected. However, the committee members are deeply divided on what to do about a slowing U.S. economy. The decision to cut rates was nearly unanimous among FOMC members, however, with the lone dissent coming from Fed Governor Stephen Miran, who favored a larger rate reduction. Fed policymakers are split over the outlook for interest rates. Fed Chair Powell said the Fed's job would get more difficult as policymakers face difficult trade-offs in considering whether to keep cutting rates, with some officials concerned about inflation and others concerned about the labor market. Powell faced pointed questions from the press about Fed independence, given Miran’s dual role on leave from the White House’s Council of Economic Advisers. Powell reiterated the central bank’s commitment to its nonpartisan mandate: “We’re strongly committed to maintaining our independence… It is deeply in our culture to do our work based on incoming data.” Major U.S. banks—JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America—cut their prime lending rates from 7.50% to 7.25% following the Fed rate cut.
In overnight news, China’s Shanghai composite stock index rose 0.2%, while the Shenzhen component added 0.5% Thursday, with mainland benchmarks touching fresh multi-year highs and tracking global stock-market gains after the Federal Reserve delivered a quarter-point rate cut Wednesday, as expected. Risk appetite was further lifted by optimism over U.S.-China trade negotiations and a potential TikTok agreement, with President Trump and President Xi Jinping set to speak Friday.
The key outside markets today see the U.S. dollar index up just a bit, while crude oil prices are near steady and trading around $64.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.05%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, leading economic indicators and Treasury international capital data.
Technically, December gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,600.00. First resistance is seen at $3,715.00 and then at this week’s high of $3,744.00. First support is seen at the overnight low of $3,667.30 and then at $3,650.00. Wyckoff's Market Rating: 8.0.
December silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $45.00. The next downside price objective for the bears is closing prices below solid support at $40.00. First resistance is seen at $42.50 and then at $43.00. Next support is seen at this week’s low of $41.48 and then at $41.08. Wyckoff's Market Rating: 8.0.
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