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Gold Sells Off After Upbeat U.S. Jobs Report

Kitco News

(Kitco News) - Gold and silver markets are trading solidly lower in early U.S. trading Friday, following a better-than-expected U.S. jobs report that boosted the U.S. dollar index. Both metals’ prices were close to steady just before the important date release. April Comex gold futures were last down $10.90 an ounce at $1,337.10. March Comex silver was last down $0.235 at $16.925 an ounce.

Friday morning’s monthly U.S. employment situation report from the Labor Department showed the key non-farm payrolls number up 200,000. The consensus forecast came in at up 177,000. The report falls into the camp of the U.S. monetary policy hawks, who want to see U.S. interest rates rise at a faster pace.

World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The indexes saw additional selling pressure after the jobs report. The U.S. stock indexes have become wobbly this week. Bearish weekly low closes in the indexes on Friday would be a technical clue that near-term market tops are in place. That would also be a bullish development for the competing asset class, safe-haven gold and silver.

In overnight news, the Euro zone December producer price index was reported up 0.2% from November and up 2.2%, year-on-year. Those numbers were in line with market expectations.

The key “outside markets” on Friday morning see the U.S. dollar index solidly higher on the jobs data and on a corrective bounce after closing at a more-than-three-year low close on Thursday. Meantime, Nymex crude oil prices are slightly lower and trading below $66.00 a barrel. The U.S. Energy Information Administration has reported that U.S. crude oil production has risen above 10 million barrels a day for the first time in 50 years.

Other U.S. economic data due for release Friday includes the ISM New York report on business, manufacturers’ shipments and inventories, and the University of Michigan consumer sentiment survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bulls still have the overall near-term technical advantage, but are fading a bit. Prices are still in a six-week-old uptrend on the daily bar chart, but just barely. A bearish weekly low close on Friday would be a chart clue that a near-term market top is in place. Bulls’ next upside technical objective is pushing and closing prices above chart resistance at the January high of $1,370.50. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,310.00. First support is seen at this week’s low of $1,335.50 and then at $1,330.00. First resistance is seen at $1,345.00 and then at $1,350.00. Wyckoff’s Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver bulls have lost their slight overall near-term technical advantage and are poised to produce a technically bearish weekly low close on Friday. The next upside price breakout objective is closing futures prices above solid technical resistance at the January high of $17.705 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the January low of $16.735. First resistance is seen at today’s high of $17.225 and then at $17.375. Next support is seen at $16.735 and then at $16.50. Wyckoff's Market Rating: 5.0.

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