Gold Price Weaker But Downbeat ADP Jobs Number Limits Pressure
San Francisco (May 4) Gold prices are modestly lower in early U.S. trading Wednesday, on some follow-through selling and profit-taking pressure that surfaced Tuesday. However, gold prices are up from the overnight low following a disappointing U.S. ADP jobs number that was just released. June Comex gold futures were last down $1.50 an ounce at $1,290.40. July Comex silver was last down $0.039 at $17.46 an ounce.
The U.S. ADP national employment report just issued showed a gain of 156,000 in April, which was well below expectations of a rise of around 200,000. The weak number immediately gave a boost to the gold market, which had been trading down over $10 an ounce on the day.
Traders and investors are looking ahead to Friday’s U.S. jobs report for April from the Labor Department—arguably the most important U.S. economic report of the month. The key non-farm payrolls number is expected to show a rise of 205,000 in April. However, the just-released ADP number calls into question whether the Friday jobs number can meet expectations.
World stock markets were mostly weaker overnight in lackluster trading. Japan’s markets were closed for a holiday. U.S. stock indexes are pointed toward lower openings when the New York session begins.
The key “outside markets” on Wednesday find the U.S. dollar index higher on more short covering after prices hit an eight-month low on Tuesday. The rebound in the greenback at mid-week has put some selling pressure into raw commodity markets. Nymex crude oil prices are slightly higher in early U.S. trading Wednesday and hovering just below $44.00 a barrel.
There is a heavy slate of U.S. economic data due for release Wednesday, including the weekly MBA mortgage applications survey, the ADP national employment report, preliminary productivity and costs, the U.S. services PMI, manufacturers’ shipments and inventories, the ISM non-manufacturing report on business, the weekly DOE liquid energy stocks report, and the international trade report.
Technically, June gold futures bulls still have the solid overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,306.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,250.00. First resistance is seen at $1,300.00 and then at $1,306.00. First support is seen at the overnight low of 1,277.30 and then at $1,272.40. Wyckoff’s Market Rating: 7.5
July silver bulls have the firm overall near-term technical advantage as prices hit a 15-month high Monday. However, a bearish “key reversal” down on the daily chart that has just occurred does hint that a near-term market top is in place. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at this week’s high of $18.06 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00.
Source: KitcoNews
