(Kitco News) – Gold prices are higher and have hit daily highs in early U.S. trading Friday, following a very downbeat U.S. jobs report. A weaker U.S. dollar index and lower U.S. stock indexes early today are also bullish daily elements for the precious metals markets. April gold futures were last up $10.20 an ounce at $1,296.50. May Comex silver was last up $0.115 at $15.155 an ounce.
The just-released U.S. March jobs report from the Labor Department showed a rise in non-farm payrolls of only 20,000. The number was forecast to come in at up 180,000. The ADP national employment report for February, released on Wednesday, showed a rise of 183,000. Many are already speculating the low March jobs reading will be revised significantly upward. Also, the “internals” of this month’s jobs report are not that bad.
Asian and European stock markets were mostly lower overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins. Chinese stocks had their worst daily performance in five months Friday following a bearish report on exports. In February, Chinese exports dropped a shocking 20.7% from the same period a year ago. Imports in the period were down 5.2%. The data underscored the damage inflicted on the world’s second-largest economy from the trade war with the U.S. Possibly somewhat mitigating those dour numbers is the fact that long Chinese public holidays in the period can distort the numbers.
Also overhanging the marketplace is the surprising announcement by the European Central Bank on Thursday that it is providing additional liquidity to the Euro zone banking system to try to stimulate the listing Euro zone economy. The ECB also significantly reduced its forecast for Euro zone GDP to just 1.1% growth in 2019, from a forecast of a 1.7% gain it made in December.
Not surprisingly, what just a few days ago seemed like a “done deal” on a U.S.-China trade agreement, there are now reports that some Trump administration officials say an agreement is not a certainty.
The key outside markets today see the U.S. dollar index weaker on a corrective pullback after hitting a new high for the year on Thursday. Nymex crude oil prices are lower and trading just below $56.00 a barrel.
The other U.S. economic report due for release Friday is new residential construction.
Technically, the April gold bulls have regained the slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,275.00. First resistance is seen at $1,300.00 and then at $1,310.00. First support is seen at $1,290 and then at the overnight low of $1,285.60. Wyckoff’s Market Rating: 5.5
May silver futures bears have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at this week’s high of $15.295 and then at $15.50. Next support is seen at this week’s low of $14.985 and then at $14.85. Wyckoff’s Market Rating: 4.5.
By Jim Wyckoff
For Kitco News