Gold Weaker on Bearish Outside Market Forces; US Jobs Data on Deck
New York (Mar 5) Gold prices ended the U.S. day session modestly lower in a choppy, two-sided trading affair Thursday. Slight early gains in gold gave way to selling pressure as the trading day progressed. A rallying U.S. dollar index that hit an 11.5-year high Thursday remains a significantly bearish “outside market” that is working against both gold and silver. April Comex gold was last down $3.50 at $1,197.40 an ounce. May Comex silver was last up $0.002 at $16.16 an ounce.
The strong greenback continues to be a feature in the market place and has impacted many other markets in recent months, including being bearish for most raw commodities that are priced in U.S. dollars on the world market. That makes those commodities more expensive to purchase with non-U.S. currency.
The other key outside market on Thursday saw Nymex crude oil trading lower after a firmer start to the day. The overall technical posture of the crude oil market remains in the bearish camp, even though the past few weeks have seen sideways and choppy price action on the daily chart. The crude oil market will have to bottom out and begin to trend at least sideways in the coming weeks in order for most raw commodity markets to escape their bust cycles.
Traders and investors are awaiting Friday’s U.S. jobs report, which is arguably the most important economic report of the month. The key non-farm jobs number is expected to be up 240,000 in February.
In overnight news, China’s prime minister at the annual National People’s Congress lowered his country’s annual GDP forecast to 7.0% in 2015 from 7.5% in 2014. The move was not unexpected and China’s growth rate is still about double what the rest of the world’s major economies will see this year.
The European Central Bank meeting Thursday saw no changes in policy but more details of the latest stimulus plan were revealed. The quantitative easing measures announced at a previous meeting go into effect Monday. There was little market reaction to the ECB meeting and press conference, which contained no surprises.
Meantime, the Bank of England kept its monetary policy steady at its meeting Thursday, as expected by the market place.
The London P.M. gold fix was $1,202.00 versus the previous A.M. fixing of $1,199.75.
Technically, April gold futures prices closed near the session low and scored a bearish “outside day” down on the daily bar chart today. The gold bears have the firm overall near-term technical advantage. A six-week-old downtrend is in place on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,223.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the March low of $1,190.00. First resistance is seen at $1,200.00 and then at today’s high of $1,208.90. First support is seen at this week’s low of $1,194.60 and then at $1,190.00. Wyckoff’s Market Rating: 3.0
May silver futures prices closed near the session low today. Silver bears have the firm near-term technical advantage. A six-week-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at today’s high of $16.355 and then at Tuesday’s high of $16.58. Next support is seen at this week’s low of $16.055 and then at $16.00. Wyckoff's Market Rating: 2.5.
May N.Y. copper closed down 95 points at 265.00 cents today. Prices closed near the session low today. The key outside markets were bearish for copper today, as the U.S. dollar index was sharply higher and hit an 11.5-year high, while crude oil prices were weaker. The copper market bears have the overall near-term technical advantage but the bulls have some upside momentum to suggest that a market bottom is in place. A four-week-old uptrend is in place on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 280.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 255.00 cents. First resistance is seen at Tuesday’s high of 269.50 cents and then at this week’s high of 271.80 cents. First support is seen at this week’s low of 262.90 cents and then at 260.00 cents. Wyckoff's Market Rating: 3.0.
Source: KitcoNews
