Gold Weaker Amid Choppy Trading; U.S. Jobs Report On Deck
New York (Feb 5) Gold prices ended the U.S. day session modestly lower in quieter dealings Thursday. Trading this week has been choppy as many traders and investors were treading water ahead of the key U.S. employment situation report Friday morning. April Comex gold was last down $1.10 at $1,263.40 an ounce. March Comex silver last traded down $0.155 at $17.235 an ounce.
Buying interest in the safe-haven gold market was limited by an improving investor risk appetite the past couple days, evidenced by the rallies in U.S. stock indexes. However, sellers were leery Thursday due to bullish “outside market” forces—a lower U.S. dollar index and sharply higher crude oil prices.
Reports there is an effort from the Western countries to broker a peace deal between Russia and the Ukraine added a bit to the risk appetite in the market place Thursday, even though no specifics of the plan were yet agreed upon by the principals.
Traders and investors are awaiting Friday’s January U.S. jobs report, which is arguably the most important U.S. economic data point of the month. Forecasts call for the key non-farm payrolls number to be up 237,000 in January. A significant miss to the upside or downside is likely to cause higher markets volatility.
In overnight news, the European Union took a surprisingly hard line against Greece’s efforts to gain leniency on its outstanding government debt. The European Central Bank said it would no longer honor Greek debt as collateral for lending to banks. The ECB move dashed recent efforts by the new Greek government to alleviate debt repayment strains. Greek stock and bond prices tumbled on the news.
The Bank of England left its interest rates unchanged at its regular meeting. The move was not unexpected.
The European Union on Thursday raised its economic growth forecast due to the falling price of oil and the weaker Euro currency. The European Commission said Euro zone GDP this year should be up 1.3% and up 1.9% in 2016. In November the Commission expected rises of 1.1% and 1.7%, respectively.
The London P.M. gold fix was $1,259.25 versus the previous A.M. fixing of $1,263.75.
Technically, April gold futures prices closed near mid-range on more chart consolidation. The bulls still have the slight near-term technical advantage but need to show more power soon to keep it. A 2.5-month-old uptrend on the daily bar chart is still in place, but just barely. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,252.10. First resistance is seen at today’s high of $1,274.60 and then at this week’s high of $1,286.50. First support is seen at this week’s low of $1,255.80 and then at last week’s low of $1,252.10. Wyckoff’s Market Rating: 5.5
March silver futures prices closed near mid-range and saw more short covering. Silver bulls have the slight near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart, but just barely. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $18.505 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $16.74. First resistance is seen at today’s high of $17.50 and then at this week’s high of $17.75. Next support is seen at today’s low of $16.92 and then at last week’s low of $16.74. Wyckoff's Market Rating: 5.5.
March N.Y. copper closed up 85 points at 259.95 cents today. Prices closed nearer the session high on mild short covering. The key “outside markets” were bullish today—lower U.S. dollar index and sharply higher crude oil prices. The copper market bears still have the firm overall near-term technical advantage as are in a six-month-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 275.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the contract low of 241.90 cents. First resistance is seen at this week’s high of 261.85 cents and then at 263.60 cents. First support is seen at 255.55 cents and then at today’s low of 253.35 cents. Wyckoff's Market Rating: 2.5.