(Kitco News) - Gold and silver prices are weaker in early U.S. trading Thursday. Some normal profit taking from the shorter-term futures traders is featured, amid normal downside price corrections in their existing uptrends. February gold was last down $9.20 at $4,223.50. March silver prices were down $0.685 at $57.93.
Global stock markets were mixed overnight. U.S. stock indexes are pointed to slightly firmer openings when the New York day session begins.
In overnight news, Ukrainian negotiators will join a new round of talks in Florida as Russian President Vladimir Putin said some of the points in a U.S.-backed peace plan were unacceptable to him, the latest sign an agreement likely remains distant. The negotiations are difficult, and Moscow disagrees with some of what’s been suggested by the US, Putin said in an interview to India Today, as cited by the state-run Tass news service and reported by Bloomberg. Putin’s comments are likely to cast more doubt over President Trump’s push to broker a peace deal after almost four years of Russia’s full-scale invasion of Ukraine. “Intense shuttle diplomacy over the past few days has failed to break the deadlock as the Kremlin presses Ukraine to hand over control of land that Moscow has failed to seize by force in the east of the country. Kyiv has repeatedly rejected that demand,” said the Bloomberg report. Trump said Wednesday that he doesn’t know what the outcome of successive rounds of talks over a deal will be, though he called the last meeting his special envoy, Steve Witkoff, and son-in-law, Jared Kushner, held with Putin in Moscow on Tuesday “reasonably good.”
Global commodity shipping rates surging. Rates to ship commodities from energy to bulk ores across the oceans are heading for a rare year-end surge as conflicts, sanctions, and swelling output upend global supply lines, according to a Bloomberg report. “Daily earnings to transport crude on key routes have seen the biggest jump this year, up 467%, while rates to ship liquefied natural gas and commodities such as iron ore have increased more than fourfold and twofold, respectively. Freight costs typically dip at year-end due to seasonal weakness in demand. Vessels are spending more time at sea transporting cargo, contributing to the spike, and several shipping executives expect tightness in the broader market to continue at least through early next year,” said the report. “We’re seeing an old school, extremely tight physical shipping market,” Lars Barstad, the chief executive officer of Frontline Management AS, which operates a fleet of oil tankers, including very-large crude carriers, said on an earnings call late last month. “We’re not seeing any kind of weakness,” he said and as reported by Bloomberg. The Baltic Freight Index, a benchmark measure for ships hauling bulk commodities, including grain and ore, rose to a 20-month high at the end of November as anticipation grew over a major iron ore project in Guinea coming online and weather-related delays off China squeezed supply. More broadly, hostilities around key routes have contributed to an overall increase in costs, said the report.
The key outside markets today see the U.S. dollar index near steady. Crude oil prices are a bit higher and trading around $59.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.09%.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $4,433.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,100.00. First resistance is seen at the overnight high of $4,246.90 and then at Wednesday’s high of $4,273.30. First support is seen at $4,200.00 and then at Tuesday’s low of $4,194.00. Wyckoff's Market Rating: 7.5.
March silver futures bulls have the strong overall near-term technical advantage. Their next upside price objective is closing prices above solid technical resistance at $60.00. The next downside price objective for the bears is closing prices below solid support at $55.00. First resistance is seen at the contract high of $59.655 and then at $60.00. Next support is seen at $57.00 and then at this week’s low of $56.85. Wyckoff's Market Rating: 9.0.
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