Gold prices up as U.S. monthly non-farm payrolls see big drop
(Kitco News) - Gold prices are trading moderately up in early U.S. trading Friday, in the wake of another dour U.S. economic report that shows a crippled U.S. economy. June gold futures were last up $5.30 an ounce at $1,643.50. May Comex silver prices were last down $0.029 at $14.625 an ounce.
Friday’s just-released monthly employment report for March showed an unemployment rate of 4.4% (3.5% in February) and a big non-farm payrolls decline of 701,000 (up 273,000 in February). Analysts were looking for a 10,000 decline in payrolls. This is be the first decline in monthly non-farm payrolls in nine years. The monthly employment report for April is very likely to be much more grim than the March jobs data.
Global stock markets were flat to weaker in overnight trading. U.S. stock indexes are pointed toward lower openings when the New York day session begins. In a stark show of how much damage the coronavirus outbreak has done to the Euro zone economy in such a short period of time, the bloc’s March composite purchasing managers’ index (PMI)—which includes both the manufacturing and services sector—came in at a record low of 29.7 versus a reading of 51.6 in February. A reading below 50.0 suggests contraction.
China’s central bank again eased its monetary policy Friday by lowering its reserve requirement ratio. The world’s second-largest economy has seen its central bank make several monetary policy stimulus moves over the past month.
The important outside markets today see Nymex crude oil prices higher and trading around $26.50 a barrel, on short covering and perceived bargain hunting after hitting an 18-year low of $19.27 a barrel Monday. Reports Friday said OPEC officials will meet next Monday via a conference call to discuss production cuts of at least 6 million barrels. OPEC members also said they may invite U.S. oil companies to join the call, and want them to commit to reducing their production, too. President Trump said Thursday there would be an agreement between the two major oil producers. Trump reportedly said a figure of 10-15 million barrels, while the Saudi Kingdom said that any cuts would not be that large. Trump is to meet with U.S. oil company executives Friday, and OPEC officials will be watching the results of that meeting very closely. Percentage-wise, Thursday’s rally in crude oil prices was the largest gain ever.
The U.S. dollar index is higher this morning as the bulls are having a very good week. The 10-year U.S. Treasury note yield is trading around 0.6% Friday morning.
Other U.S. economic data due for release Friday includes the U.S. services PMI, the ISM non-manufacturing report on business, and the global services PMI.
Technically, the gold bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,675.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,576.00. First resistance is seen at the overnight high of $1,644.50 and then at $1,650.00. First support is seen at the overnight low of $1,624.40 and then at $1,613.00. Wyckoff's Market Rating: 6.5
May silver futures bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.00. First resistance is seen at $15.00 and then at $15.20. Next support is seen at $14.25 and then at $14.00. Wyckoff's Market Rating: 5.0.