(Kitco News) - Gold prices are firmer in early U.S. trading Friday, on a short-covering rebound in the futures market and amid some perceived bargain-basement-buying in the cash market. Gold prices Thursday notched a 10-month low. The just-released U.S. jobs report was in line with market expectations and did not have a big impact on the marketplace. February Comex gold was last up $5.20 an ounce at $1,174.90. March Comex silver was last up $0.024 at $16.53 an ounce.
The big economic report of the week saw the U.S. Labor Department employment report for November at up 178,000 in the key non-farm payrolls figure. The non-farms number was forecast to rise by 180,000. Other components of the jobs report were deemed upbeat, which bolsters notions the Federal Reserve will indeed raise U.S. interest rates at its December FOMC meeting.
U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Some market watchers are now wondering if the “Trump rally” in world stock markets has now run its course. If such is the case, that would benefit the competing asset class, the precious metals markets.
Stock markets in Europe were pressured in part on worries about this Sunday’s Italian referendum on constitutional reforms. A “no” vote on the reforms could eventually put Italy in violation of European Union rules. A no vote could be supportive for safe-haven gold due to increased uncertainty regarding the fate of the European Union.
World bond markets remain in focus as yields continue on the rise. U.S. 10-year yields have risen to 2.4% late this week. German government bonds are yielding around 0.3%, which is still a historically low number. However, just several weeks ago German Bund yields were in negative territory. There are firm indications many world government bond markets are entering major bear markets for the first time in many years, or even decades.
The key "outside markets" on Friday see the crude oil market weaker on a normal corrective pullback from the very strong gains seen Wednesday and Thursday that saw Nymex futures prices push back above $50.00 a barrel. Meantime, the U.S. dollar index is trading slightly lower today on a corrective pullback from recent gains. The greenback bulls still have the solid near-term technical advantage as U.S. dollar index prices last week hit a 13-year high.
Other U.S. economic data due for release Friday includes the ISM New York report on business.
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Technically, February gold futures bears have the solid overall near-term technical advantage. Prices have been trending lower for five months. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,150.00. First resistance is seen at the overnight high of $1,179.80 and then at $1,185.00. First support is seen at Thursday’s low of 1,162.20 and then at $1,150.00. Wyckoff’s Market Rating: 2.0
March silver bears have the solid near-term technical advantage as prices hit a five-month low last week. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is at the overnight high of $16.74 and then at this week’s high of $16.945. Next support is seen at last week’s low of $16.245 and then at $16.00. Wyckoff's Market Rating: 2.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
