Gold Down Amid Strong U.S. Jobs Report, Little Risk Aversion
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(Kitco News) - Gold prices are moderately lower in early U.S. trading Friday. Some price pressure is coming from a surprisingly strong U.S. jobs report that was just released. Also, better risk appetite in the marketplace at present is stymieing the safe-haven gold and silver bulls. April Comex gold futures were last down $3.40 an ounce at $1,318.20. May Comex silver was last down $0.02 at $16.47 an ounce.
The most important U.S. economic data point of the month showed the employment situation report for February from the Labor Department’s key non-farm payrolls number up a much-larger-than-expected 313,000. The consensus forecast was up 205,000. The February unemployment rate was 4.1% Average U.S. hourly earnings crept up 0.1% from January and were up 2.6%, year-on-year. The wage numbers were less than the marketplace expected, suggesting tamer inflation. The jobs report falls squarely into the camp of the U.S. monetary policy hawks, who want to see interest rates rise sooner.
The U.S. dollar index initially rallied on the news, which also put downside pressure on the precious metals markets. However, the USDX backed off its highs. But the U.S. stock indexes are in rally mode after the strong jobs report, and that’s a negative for the competing asset class of precious metals.
Reports overnight said a meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un is set for May. However, many are skeptical such a meeting will actually take place. Still, the news adds to the upbeat investor risk appetite presently in the world marketplace, which is bearish for gold and silver.
In other overnight news, China and European Union officials lashed out at the new U.S. trade tariffs signed into law by Trump on Thursday.
Other U.S. economic data due for release Friday includes the monthly wholesale trade report.
Technically, April gold futures bulls and bears are on a level overall near-term technical playing field. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at today’s high of $1,322.80 and then at $1,330.00. First support is seen at today’s low of $1,313.40 and then at $1,309.00. Wyckoff's Market Rating: 5.0
May silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the February high of $17.04 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $16.60 and then at $16.75. Next support is seen at today’s low of $16.33 and then at the March low of $16.16. Wyckoff's Market Rating: 4.0.