(Kitco News) – Gold prices are slightly higher in early U.S. trading, on some short covering in the futures market and some perceived bargain hunting in the cash market. The metals are also supported as the U.S. dollar index has turned weaker despite an upbeat U.S. jobs report that was just released. June gold futures were last up $0.40 an ounce at $1,294.70. May Comex silver was last up $0.061 at $15.15 an ounce.
The U.S. Labor Department’s employment report for March showed a non-farm payrolls rise of 196,000, which was above market expectations for a rise of 173,000, on average. The decent jobs report was enough to rally the U.S. stock market to multi-month highs, but not strong enough to change trader ideas that the Federal Reserve will continue to be patient on any U.S. interest rate increases. The U.S. dollar index firmed up in the initial aftermath of the report, but then moved to slightly lower levels on the day.
U.S. stock indexes did rally to multi-month highs in the Dow and S&P 500, in the wake of the jobs report. All week long the safe-haven gold and silver market bulls have been squelched by upbeat trader and investor attitudes that have rallied the competing asset class of equities.
Asian and European stock indexes were mixed to firmer overnight. China’s markets were closed today. Traders and investors are still in a keener “risk-on” mentality following news that President Trump made positive remarks Thursday afternoon regarding a U.S.-China trade agreement being reached within the next four weeks. However Trump did not come right out and say a deal was done or set a date for a summit meeting with China President Xi Jinping. Many were thinking Trump would do that after his Thursday meeting with high-level China trade officials.
In overnight news, markets did not react to reports that U.K. Prime Minister Theresa May has asked the European Union to delay is exit from the bloc until June 30.
President Trump on Thursday picked Herman Cain to become a member of the Federal Reserve board of governors. He needs to be confirmed by Congress. Cain is a proponent of U.S. monetary policy being tied to a “gold standard” and was with the Kansas City Federal Reserve in the 1990s.
The other key outside market today sees Nymex crude oil prices slightly up and trading around $62.25 a barrel.
Other U.S. economic reports due for release Friday includes the consumer credit report.
Technically, the gold bulls still have the overall near-term technical advantage but have faded recently and need to show fresh power soon. Traders are eyeing a bearish head-and-shoulders top reversal pattern on the daily bar chart that has formed the past couple months. This week’s price action did see a move below the “neckline” of the formation, which is a bearish chart signal. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the March high of $1,330.80. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,287.50. First resistance is seen at this week’s high of $1,301.70 and then at $1,305.00. First support is seen at this week’s low of $1,284.90 and then at $1,280.00. Wyckoff’s Market Rating: 6.0
May silver futures bears have the slight overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $15.65 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is seen at this week’s high of $15.19 and then at 15.315. Next support is seen at this week’s low of $14.86 and then at $14.75. Wyckoff’s Market Rating: 4.5.
By Jim Wyckoff
For Kitco News