(Kitco News) – Gold prices are modestly higher and near daily highs in early U.S. trading Friday, and have moved well up from solid overnight losses. A tepid U.S. employment report just released has breathed a bit of new life into the safe-haven metals bulls, who have been on the defensive late his week. Bullish traders also stepped in to “buy the dips” in both gold and silver markets. December gold futures were last up $4.40 an ounce at 1,529.90. December Comex silver prices were last up $0.008 at $18.78 an ounce.
The just-released U.S. employment situation report for August from the Labor Department showed the key “non-farm” payrolls component of the report rise 130,000, which is a downside miss from market expectations for a gain of 150,000. This report falls into the camp of the U.S. monetary policy doves, who want to see interest rate cuts in the coming months, including in September when the FOMC meets in less than two weeks. Thursday’s ADP national employment report for August came in at up 195,000 jobs, which was significantly higher than the forecast of up 140,000. That made today’s jobs report even more surprisingly weak.
Asian and European stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trader and investor risk appetite has markedly improved this week, which has pushed the U.S. stock indexes back toward their summertime highs.
Protesters are set to demonstrate in Hong Kong again this weekend, reports said. This week Hong Kong’s leader withdrew from consideration a proposed law that would have allowed the extradition of Hong Kong citizens to mainland China for criminal trials. Right now it appears doubtful the reversal of Hong Kong’s leader on the extradition matter will be enough to stop the civil unrest. Now, protesters are calling for more change, including Hong Kong’s leader stepping down. Importantly, the Fitch credit rating agency has just downgraded its main rating on Hong Kong.
The Brexit saga continues as the October deadline for a U.K. deal with the European Union approaches. Prime Minister Boris Johnson wants out with no extension of time to reach a “soft” Brexit. He said Thursday he’d “rather be dead in a ditch” than extend Brexit negotiations. However, votes this week from Parliament appear to have defeated his “hard” Brexit stance. The matter continues to unsettle European markets.
China’s central bank moved to again ease its monetary policy Friday by lowering the reserve requirement ratio for banks.
The Euro zone second-quarter GDP on Friday came in unrevised at up 0.2% from the first quarter, and was up 1.2%, year-on-year.
The key “outside markets” today see Nymex crude oil prices weaker and trading around $55.35 a barrel. The U.S. dollar index is slightly weaker in early U.S. trading today.
There is no other U.S. economic data due for release Friday. Federal Reserve Chairman Jerome Powell does deliver a speech in Zurich, Switzerland later Friday.
Technically, the gold bulls still have the firm overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $1,600.00. Bears’ next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,500.00. First resistance is seen at the overnight high of $1,528.50 and then at 1,535.00. First support is seen at the overnight low of $1,510.70 and then at $1,500.00. Wyckoff’s Market Rating: 7.0
December silver futures bulls still have the firm overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $17.64. First resistance is seen at $19.00 and then at $19.25. Next support is seen at $18.50 and then at $18.25. Wyckoff’s Market Rating: 7.0.
By Jim Wyckoff
For Kitco News