(Kitco News) - Gold and silver prices are weaker in early U.S. trading Thursday, with profit taking from the shorter-term futures traders featured following recent gains that pushed gold to a record high and silver to a 14-year high on Wednesday. Steady safe-haven demand amid the U.S. government shutdown and other uncertain geopolitical matters will keep a price floor under the two precious metals in the near term. December gold was last down $15.20 at $4,055.00. December silver prices were down $0.409 at $48.585.
Global stock markets were mixed to firmer overnight. U.S. stock indexes are set to open near steady when the New York day session begins after poking to record highs overnight.
Fed’s FOMC minutes suggest more rate cuts coming this year. The Wednesday afternoon release of the minutes of the last Federal Reserve Open Market Committee (FOMC) meeting in September showed FOMC members had a willingness to lower interest rates further this year, but many expressed caution due to concerns over inflation. Most members reckoned it likely would be appropriate to ease monetary policy further over the remainder of this year, with new projections showing officials expected two additional quarter-point cuts by year’s end. Participants stressed the importance of taking a balanced approach in promoting the committee’s employment and inflation goals as they considered their next move. Fed officials at that gathering voted 11-1 to lower the Fed funds interest rate range by a quarter percentage point to 4% to 4.25%, the first such cut this year. One official, the newly-sworn-in Stephen Miran, favored a half-point reduction and voted against the decision. The markets showed no significant reactions to the FOMC minutes, as they contained no big surprises.
Bond market suggesting “jumpy” markets once U.S. economic data starts flowing again. While there are presently no indications the U.S. government shutdown is close to ending, when it does and backed-up U.S. economic data starts to flow, the marketplace will see increased volatility. That’s what U.S. Treasury traders believe, and bond traders have the reputation of being the smartest guys/gals in the room. The pent-up U.S. data includes reports on employment and inflation. “The delay may complicate the collection of economic figures, making it harder for the Federal Reserve to decide whether to ease again, and options activity shows demand for hedges against a range of Fed scenarios. Traders are preparing for potential turbulence in the $30 trillion U.S. Treasuries market, with options pricing indicating a likelihood of volatility once the data is released, and some expecting jumpy price action if the data is an outlier,” said a Bloomberg report.
Israel, Hamas closer to ending war. Israel and Hamas have reached a deal for the release of all hostages held by Hamas in Gaza, a major step toward ending their two-year war. The agreement was reached after several days of indirect negotiations between the warring sides in the Egyptian resort of Sharm El-Sheikh, brokered by the U.S., Egypt, Qatar, and Turkey. As part of the deal, Israel is to release jailed Palestinians and allow a ramp-up of aid supplies to Gaza, while Israeli forces will withdraw in steps until they reach a buffer zone just within Gaza's border.
The key outside markets today see the U.S. dollar index slightly up and at a nine-week high. crude oil prices are slightly down and trading around $62.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.133%.
Technically, December gold futures bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $4,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,850.00. First resistance is seen at the record high of $4,081.00 and then at $4,100.00. First support is seen at the overnight low of $4,019.20 and then at $4,000.00. Wyckoff's Market Rating: 9.0.
December silver futures bulls have the strong overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $50.00. The next downside price objective for the bears is closing prices below solid support at $45.00. First resistance is seen at this week’s high of $49.195 and then at $50.00. Next support is seen at the overnight low of $47.85 and then at $47.00. Wyckoff's Market Rating: 9.0.
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