Gold Sells Off After Upbeat U.S. Jobs Report

(Kitco News) - Gold and silver markets are trading solidly lower in early U.S. trading Friday,following a better-than-expected U.S. jobs report that boosted the U.S. dollarindex. Both metals’ prices were close to steady just before the important daterelease. April Comex gold futures were last down $10.90 an ounce at $1,337.10.March Comex silver was last down $0.235 at $16.925 an ounce.

Fridaymorning’s monthly U.S. employment situation report from the Labor Departmentshowed the key non-farm payrolls number up 200,000. The consensus forecast camein at up 177,000. The report falls into the camp of the U.S. monetary policyhawks, who want to see U.S. interest rates rise at a faster pace.

Worldstock markets were mostly lower overnight. U.S. stock indexes are pointedtoward solidly lower openings when the New York day session begins. The indexessaw additional selling pressure after the jobs report. The U.S. stock indexeshave become wobbly this week. Bearish weekly low closes in the indexes onFriday would be a technical clue that near-term market tops are in place. Thatwould also be a bullish development for the competing asset class, safe-havengold and silver.

Inovernight news, the Euro zone December producer price index was reported up0.2% from November and up 2.2%, year-on-year. Those numbers were in line withmarket expectations.

Thekey “outside markets” on Friday morning see the U.S. dollar index solidlyhigher on the jobs data and on a corrective bounce after closing at amore-than-three-year low close on Thursday. Meantime, Nymex crude oil pricesare slightly lower and trading below $66.00 a barrel. The U.S. Energy InformationAdministration has reported that U.S. crude oil production has risen above 10million barrels a day for the first time in 50 years.

OtherU.S. economic data due for release Friday includes the ISM New York report onbusiness, manufacturers’ shipments and inventories, and the University ofMichigan consumer sentiment survey.

Technically,Aprilgold futures bulls still have the overall near-term technical advantage,but are fading a bit. Prices are still in a six-week-old uptrend on the dailybar chart, but just barely. A bearish weekly low close on Friday would be achart clue that a near-term market top is in place. Bulls’ next upsidetechnical objective is pushing and closing prices above chart resistance at theJanuary high of $1,370.50. Bears' next near-term downside price breakoutobjective is closing prices below solid technical support at $1,310.00. First supportis seen at this week’s low of $1,335.50 and then at $1,330.00. First resistanceis seen at $1,345.00 and then at $1,350.00. Wyckoff’s Market Rating: 6.0

Marchsilver bulls have lost their slight overall near-term technical advantage andare poised to produce a technically bearish weekly low close on Friday. Thenext upside price breakout objective is closing futures prices above solid technicalresistance at the January high of $17.705 an ounce. The next downside pricebreakout objective for the bears is closing prices below solid support at theJanuary low of $16.735. First resistance is seen at today’s high of $17.225 andthen at $17.375. Next support is seen at $16.735 and then at $16.50. Wyckoff'sMarket Rating: 5.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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