(Kitco News) - Gold and silver prices are posting rallies in early U.S. trading Friday, in the immediate aftermath of a downbeat U.S. jobs report that falls into the camp of the monetary policy doves, who want to see U.S. interest rate cuts from the Federal Reserve this year. June gold was last down $1.70 at $2,309.30. July silver was last down $0.213 at $26.535.
The April U.S. jobs report from the Labor Department showed the key non-farm jobs component of the jobs report up 175,000 which is well below the forecast rise of 240,000 and follows the March report showing a revised rise of 315,000. The unemployment rate in April up-ticked slightly to 3.9% versus expectations for 3.8%, which is the same as the March report. The report is being pegged by some analysts and market watchers as just about right: not too hot and not too cold. That would also suggest the Federal Reserve could indeed cut interest rates at some point this year. But that would be only if inflation numbers cool further. Today’s report is just what the gold and silver market bulls wanted to see.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to toward solidly higher openings when the New York day session begins, following the “Goldilocks” U.S. jobs report.
The key outside markets today see the U.S. dollar index sharply down and sold off after the downbeat jobs report. Nymex crude oil prices are higher and trading around $79.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.477%--down from around 4.6% seen just before the jobs report was released.
Other U.S. economic data due for release Friday includes the U.S. services PMI and the ISM report on business services.
Technically, the gold futures bulls have the overall near-term technical advantage but are fading. A price uptrend on the daily bar chart has been negated and prices are starting to trend down on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,364.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,200.00. First resistance is seen at Thursday’s high of $2,336.10 and then at $2,350.00. First support is seen at the overnight low of $2,303.20 and then at this week’s low of $2,291.70. Wyckoff's Market Rating: 6.5.
The silver bulls and bears are on a level overall near-term technical playing field. A three-week-old price downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $28.00. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at $27.455 and then at $27.75. Next support is seen at the overnight low of $26.61 and then at this week’s low of $26.255. Wyckoff's Market Rating: 5.0
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