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Gold, silver see price pressure after upbeat U.S. jobs data

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(Kitco News) - Gold and silver prices are lower again in early U.S. trading Friday, pressured in part by some upbeat U.S. economic data just released. Gold prices hit a nine-month low today and silver a five-week low. Rising government bond yields this week and a higher U.S. dollar index are also bearish outside forces working against the metals bulls. April gold futures were down $14.80 at $1,685.70 and May Comex silver was last down $0.431 at $25.03 an ounce.

The just-released Employment Situation Report for February from the U.S. Labor Department showed the key non-farm payrolls number up 379,000 compared to forecasts for up 210,000 in February. The unemployment rate was 6.2%. The upbeat jobs report put moderate downside price pressure on gold and silver futures.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.

The marketplace is still buzzing about a speech by Fed Chairman Jerome Powell Thursday at a jobs summit. Powell said he does not see inflation becoming long-term problematic but it may see a short-term spike as the U.S. economy recovers from the pandemic later this year. Powell added that the recent rise in government bond yields is notable but also probably not a longer-term phenomenon. He also said the U.S. still faces a long road to full economic recovery. What traders took away from the speech is that the Fed appears willing to let bond yields rise (prices fall) without intervention from the central bank. The 10-year U.S. Treasury note saw its yield quickly push toward 1.6% after Powell’s comments, despite many analysts calling Powell’s remarks overall dovish on U.S. monetary policy. It’s been said many times that bond traders are the smartest traders around. What the bond market is telling the marketplace is that bond traders really do not believe Powell’s assessment that inflation will not continue to heat up in the coming months, and that higher inflation in the coming months could prompt the Fed to raise interest rates much sooner than many had reckoned up until just recently. The U.S. Treasury’s 10-year note was yielding 1.54% early Friday morning.

In other overnight news, China’s economic leaders set the world’s second-largest economy’s annual growth rage for 2021 at 6% or above. That figure was seen as modest by some economists, who are predicting China’s gross domestic product to advance at an 8% clip this year. On the inflation front, China’s officials are looking for around 3% consumer price inflation on the year.

The key “outside markets” today see Nymex crude oil futures prices solidly higher, hitting a 14-month high, and trading around $65.50 a barrel. An OPEC meeting this week saw the cartel and Russia ostensibly stand pat on crude oil production levels, when most thought the members would ramp up production levels by at least 500,000 barrels a day, if not 1 million. Crude oil prices shot higher as that news hit the wires on Thursday.

Meantime, the U.S. dollar index is higher is higher and hit a 3.5-month high overnight, supported by the rise in U.S. Treasury yields.

Other U.S. economic data due for release Friday includes the international trade report and consumer credit.

Live 24 hours gold chart [Kitco Inc.]

Technically, the April gold futures bears have the solid overall near-term technical advantage amid a two-month-old price downtrend in place on the daily chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at this week’s high of $1,757.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,650.00. First resistance is seen at $1,700.00 and then at Thursday’s high of $1,721.60. First support is seen at the overnight low of $1,683.00 and then at $1,675.00. Wyckoff's Market Rating: 2.0

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bulls and bears are on a level overall near-term technical playing field as the bulls have faded. Silver bulls' next upside price objective is closing prices above solid technical resistance at $28.47 an ounce. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at the overnight high of $25.46 and then at $26.00. Next support is seen at $24.75 and then at $24.50. Wyckoff's Market Rating: 5.0.

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