Gold Price Hits 6-Week High After Weaker US Jobs Data; Bulls Gain
New York (Apr 6) Gold prices ended the U.S. day session solidly higher and hit a six-week high Monday, boosted by last Friday’s much-weaker-than-expected U.S. employment report. The improving chart postures for gold and silver are also prompting technically based buying interest in both markets. June Comex gold was last up $17.80 at $1,218.70 an ounce. May Comex silver was last up $0.379 at $17.08 an ounce.
Gains in the gold and silver markets were tempered when the U.S. stock indexes rallied sharply on Monday, after being under pressure in early trading.
Last Friday’s U.S. jobs report for March showed a much-lower-than-expected rise of 126,000 in the key non-farm payrolls number, which had been expected to come in at up 248,000. Most U.S. markets were closed Friday for the Good Friday holiday. Thus, much of the market reactions to Friday’s jobs report were seen on Monday. Most European markets were closed Monday for the Easter holiday.
There are a growing number of traders and market watchers who believe the U.S. Federal Reserve will not be able to raise interest rates in 2015, due to the lackluster growth of the U.S. economy. Friday’s jobs numbers bolsters those notions. A less hawkish Fed U.S. monetary policy has in recent years been a major bullish factor for the gold and silver markets.
The U.S. dollar index traded near steady to start the trading week after dropping sharply Friday in the wake of the employment report. The greenback bulls have faded the past three weeks and there are early technical clues the dollar index has put in a major top. The recent weakness in the U.S. dollar index has also been a bullish underlying element for the precious metals markets.
The other key “outside market” saw crude oil prices sharply higher Monday. Reports said Saudi Arabia has raised its official price for its oil on the world market. Crude oil prices have worked up from the multi-year low scored in mid-March, to begin to suggest a market bottom is in place. This is another positive for precious metals and the entire raw commodity sector.
In other news, Greece has a big debt payment due to the International Monetary Fund later this week as Greek-EU official debt refinancing talks continue—with reportedly only limited success. Reports Monday said Greece will be able to make this week’s debt payment to the IMF.
Technically, June gold futures prices closed near mid-range today and hit a six-week high. Bulls gained upside momentum today and a three-week-old uptrend is now in place on the daily bar chart. Gold bears do still have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,240.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,224.50 and then at $1,230.00. First support is seen at today’s low of $1,212.60 and then at $1,200.00. Wyckoff’s Market Rating: 4.0
May silver futures prices closed nearer the session low. Bears still have the near-term technical advantage in silver. However, the bulls have some momentum and have established a three-week-old uptrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $17.405 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $16.435.