Gold Pops Higher after Weak U.S. Employment Report..

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Gold prices are moderately higher in active early-morning U.S. dealings Friday. The yellow metal was immediately boosted in the aftermath of a surprisingly weak U.S. employment report, which suggests the Federal Reserve will keep its foot on the easy-money accelerator for some time to come.

 Short covering and bargain hunting are featured in both gold and silver markets Friday morning, following strong selling pressure seen earlier this week. Gold had been trading near steady levels just prior to the jobs report’s release. June Comex gold rates last traded up $11.50 at $1,563.90 an ounce. Spot gold was last quoted up $9.60 at $1,563.75.  May Comex silver last traded up $0.163 at $26.92 an ounce.

The U.S. Labor Department reported non-farm payrolls rose just 88,000 in March, which was well below trade expectations. Other components of the jobs report were also alarmingly weak. The consensus forecast for the report called for the key non-farm payrolls figure to have risen by around 200,000 in March.

This week’s decline in gold price today has also prompted some better demand for physical gold that may continue into next week, especially from India and China, reports said.
In overnight news, the Japanese yen hit a 3.5-year low against the U.S. dollar following Thursday’s conclusion of the Bank of Japan meeting, which saw the central bank implement more aggressive monetary stimulus measures. The Euro currency was supported Friday by a better-than-expected report on German manufacturing orders, which rose 2.3% in February. However, Euro zone retail sales dropped in February by 0.3%.

North Korea and its bellicose rhetoric toward the U.S. and South Korea this week continues to attract the attention of the market place. North Korea has publicly threatened to attack the U.S. with nuclear missiles and is also threatening South Korea. The U.S. is taking North Korea’s threats seriously and has dispatched military assets to the region surrounding North Korea. The market place is digesting this news fairly well this week. However, that could change very quickly if the North Korea situation turns from just rhetoric to military conflict.

The U.S. dollar index is trading lower Friday morning on the weak jobs data and on some profit taking. The U.S. dollar bulls still have the overall technical advantage. Meantime, Nymex crude oil futures prices are lower Friday morning. The crude oil bulls have faded badly this week and the bears have near-term momentum. These two key “outside markets” will continue to have a significant daily influence on gold and silver prices.

Other U.S. economic data due for release Friday includes the international trade report, and consumer installment credit.

The London A.M. gold fix is $1,552.75 versus the previous P.M. fixing of $1,546.50.
Technically, June gold futures are seeing short covering and a corrective bounce after
prices hit a 10-month low on Thursday. Serious near-term technical damage has been inflicted this week. The gold bears still have the overall near-term technical advantage. Prices are in a six-month-old downtrend on the daily bar chart. Importantly, the “line in the sand” for the gold market, on a longer-term technical basis, is major psychological support at $1,500.00. Multiple daily closes below $1,500.00 would produce serious longer-term chart damage to then also call into question the 12-year-old uptrend in gold prices.

 The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,580.00. Bears' next near-term downside breakout price objective is closing prices below major technical support at $1,500.00. First resistance is seen at the overnight high of $1,576.00 and then at $1,580.00. First support is seen at the overnight low of $1,549.00 and then at this week’s low of $1,539.40.  

May silver futures prices hit a nine-month low Thursday. Silver bears have the solid overall near-term technical advantage as serious near-term technical damage has been inflicted this week. Prices are in a four-month-old downtrend on the daily bar chart.

Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $28.00 an ounce. The next downside price breakout objective for the bears is closing prices below major technical support at $26.00. First resistance is seen at the overnight high of $27.20 and then at Wednesday’s high of $27.315. Next support is seen at this week’s low of $26.575 and then at $26.50.

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