Gold and silver see price declines on routine profit taking

New York (Jan 6)  Gold and silver futures prices are lower in early U.S. trading Tuesday, on some normal profit taking from the shorter-term futures traders and some chart consolidation after gold hit a two-month high overnight and silver scored a four-month high. A surge in Bitcoin prices to another record high overnight may also be stealing some of the precious metals markets’ thunder at mid-week. February gold futures were last down $21.00 at $1,933.30 and March Comex silver was last down $0.195 at $27.46 an ounce.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed to weaker openings when the New York day session begins. Tuesday’s vote for two U.S. Senate seats in Georgia sees one Democrat declared the winner and the other Democrat with a very slight lead. If both seats go to the Democrats, they would control the Senate. The U.S. stock indexes are seeing some selling pressure on the news, as a Democrat-controlled Congress would likely lead to higher corporate taxes.

The U.S. economic data point of the day will be the ADP national employment report for December, which is expected to show jobs growth of 60,000 versus a rise of 307,000 in the November report. This report is the precursor to the more important Employment Situation Report issued by the Labor Department on Friday morning. That report is expected to show a U.S. unemployment rate of 6.8% and a non-farm jobs rise of 50,000 in December, versus a rise of 245,000 in November.

The other key economic report today is the afternoon release of the minutes of the last meeting of the Federal Reserve’s Open Market Committee (FOMC).

The U.S. dollar index is lower and hit another 2.5-year low in early U.S. trading. The other important outside market sees February Nymex crude oil futures prices higher, at a 10-month high, and trading around $50.30 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently around 1.02%, a 10-month high. For perspective, the German 10-year government bond (bund) sees its yield currently at -0.54%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, manufacturers’ shipments and inventories, the global services PMI, the weekly DOE liquid energy stocks report, and the FOMC minutes from the last meeting.

Live 24 hours gold chart [Kitco Inc.]

Technically, the February gold futures bulls have the firm overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the November high of $1,973.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,962.50 and then at $1,973.30. First support is seen at the overnight low of $1,926.20 and then at this week’s low of $1,906.10.

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