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Gold Takes Strong U.S. Jobs Report In Stride, Pushes Higher

Kitco News

(Kitco News) - Gold prices are modestly higher in early U.S. trading Friday, and have rallied a bit after pulling back just slightly following a much-stronger than expected headline number coming from the just-released U.S. employment report. Bulls are impressed the gold and silver markets are holding near their multi-month highs scored this week. April gold futures were last up $1.70 an ounce at $1,326.90. March Comex silver was last down $0.027 at $16.045 an ounce.

The big economic data point on Friday is the U.S. jobs report for January from the Labor Department. The key non-farm payrolls number came in at a much-higher-than-expected rise of 304,000. The consensus forecast was up 170,000. The marketplace is somewhat surprisingly taking the number in stride and markets are not reacting significantly. That may be partly due to a downward revision to the December non-farm payrolls number. Also, Wednesday’s U.S. ADP national employment report came in at up 213,000 in January. That was well above the average trade guess of up 183,000 and hinted that the Friday non-farm jobs number could come in stronger than expected—but not this strong.

The solid jobs data today could work to counter the bullish effect many markets experienced following Wednesday’s dovish FOMC statement. Price action in many markets today will be extra important, in the wake of the jobs report and with this being the first trading day of the month.

European and Asian stock markets were mixed overnight. U.S. stock indexes are also pointed toward mixed openings when the New York day session begins.

In overnight developments, China got some more downbeat economic news when its unofficial manufacturing purchasing managers index (PMI) came in below expectations. The Chinese manufacturing PMI fell to 48.3 last month. A reading below 50.0 suggests contraction in the sector.

Inflation in the Euro zone remains tame. The European Union Statistics agency reported today the January inflation rate at 1.4%, year-on-year, which is the lowest number in 10 months.

U.S. and China high-level trade talks concluded Thursday, with President Trump late in the day saying they were constructive and China will buy more U.S. products.

The outside markets today see the U.S. dollar index trading slightly higher. Meantime, Nymex crude oil prices are slightly down and trading around $53.50 a barrel.

Other U.S. economic reports due for release Friday includes the U.S. manufacturing PMI, monthly wholesale trade, the University of Michigan consumer sentiment survey, construction spending, the global manufacturing PMI, and domestic auto industry sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the April gold bulls have the firm overall near-term technical advantage and have gained power this week. Prices are in a 2.5-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid 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 this week’s high of $1,331.10 and then at $1,335.00. First support is seen at the overnight low of $1,321.20 and then at $1,313.50. Wyckoff's Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls have the near-term technical advantage and have momentum on their side. A 2.5-month-old uptrend is in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.50. First resistance is seen at this week’s high of $16.20 and then at $16.30. Next support is seen at the overnight low of $15.925 and then at this week’s low of $15.61. Wyckoff's Market Rating: 6.5.

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