Gold, Silver See Some Normal Profit Taking

(Kitco News) - Gold and silver prices are trading moderately lower in early U.S. trading Thursday. Theprofit-taking pressure seen in the precious metals is not unexpected as goldhit a 3.5-month high Wednesday, while silver prices scored a five-week high. February Comex gold was last down $5.00 an ounce at $1,313.40. March Comex silver waslast down $0.107 at $17.16 an ounce.

Thejust-released ADP national employment report for December showed a rise of250,000, which was significantly higher than the increase of 195,000 that wasexpected. Gold and silver prices down-ticked on the news.

Tradersand investors are looking ahead to Friday's U.S. employment report from theLabor Department. This report is arguably the most important U.S. data point ofthe month. The key December non-farm payrolls number is forecast to come in atup 180,000.

Worldstock markets were mostly firmer overnight. There was some upbeat economic datafrom China released Thursday, to help boost world equity markets. U.S. stockindexes are pointed toward higher openings when the New York day sessionbegins. The U.S. indexes hit new record highs overnight. The rallying worldstock markets are a bearish element for the competing asset class of preciousmetals.

Goldprices sold off Wednesday afternoon, right after the release of the minutes ofthe last Federal Open Market Committee (FOMC) meeting held on Dec. 12-13 sawthe marketplace deem the minutes as favoring the hawkish camp on U.S. monetarypolicy. The FOMC members are still seeking a gradual rise in U.S. interestrates, with some members saying the new U.S. tax policy could raise GDP.

Tensionsin Iran are still not far from the front burner of the market place. Thismatter is supporting some safe-haven gold and silver markets, as well asboosting the crude oil market.

Thekey outside markets on Thursday morning find the U.S. dollar index lower.Meantime, Nymex crude oil prices are slightly higher and hit a three-year high above$62.00 a barrel overnight.

OtherU.S. economic data due for release Thursday includes the weekly jobless claimsreport, the Challenger job-cuts report, the U.S. services PMI, the global servicesPMI, monthly U.S. chain store sales data, and the weekly DOE liquid energystocks report.

Technically,Februarygold futures bulls have the overall near-term technical advantage.Prices are in a three-week-old uptrend on the daily bar chart. Bulls' nextupside technical objective is pushing and closing prices above chart resistanceat $1,350.00. Bears' next near-term downside price breakout objective isclosing prices below solid technical support at $1,280.00. First support isseen at today's low of $1,307.10 and then at this week's low of $1,304.60. Firstresistance is seen at today's high of $1,315.50 and then at $1,320.00.Wyckoff's Market Rating: 6.0

Marchsilver bulls have the overall near-term technical advantage. Prices are in athree-week-old uptrend on the daily bar chart. The next upside price breakoutobjective is closing futures prices above solid technical resistance at theOctober high of $17.59 an ounce. The next downside price breakout objective forthe bears is closing prices below solid support at the October low of $16.435. Firstresistance is seen at this week's high of $17.265 and then at $17.37. Nextsupport is seen at $17.00 and then at last Friday's low of $16.865. Wyckoff'sMarket Rating: 6.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Canada second most significant player in global mining M&A

Plenty of potential for continued rotation out of tech

Platinum to palladium ratio low, platinum to gold high, versus history

Gold stocks up on metal and equities gains

Most major metals rebound on potential global monetary easing