Gold loses early price gains after very upbeat U.S. jobs report

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(Kitco News) - Gold and silver futures prices are weaker in early U.S. trading Friday. A surprisingly upbeat U.S. economic report has deflated the moderate overnight gains in the metals. April gold futures were last down $4.20 at $1,799.70 and March Comex silver was last down $0.115 at $22.26 an ounce.

Focus Friday is on the important U.S. Labor Department employment situation report. That report was a big surprise on the strong side. Non-farm jobs were up 467,000 in January versus expectations for a rise of only 150,000. Other internals of the jobs report were also stronger than expected. The unemployment rate in January was 4.0%. This report falls into the camp of the U.S. monetary policy hawks and somewhat vindicates the Federal Reserve’s recent hawkish tone on U.S. monetary policy.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins, after the solid jobs report. The features so far this week have been corporate earnings reports, including a downside miss on earnings by Meta (Facebook). Amazon’s earnings were solid, however.

Central bank policies remain near the front burner of the marketplace. The Euro currency posted strong gains Thursday in the wake of the European Central Bank unexpectedly leaning more hawkish on its monetary policy, in remarks from ECB President Christine Lagarde after Thursday’s regular ECB meeting. Meantime, the U.S. Federal Reserve appears to be continuing to lean more hawkish, not wanting to get farther behind the curve on fighting inflation.

The key outside markets today see crude oil prices higher and trading around $91.75 a barrel. That’s a seven-year high. Oil traders are now eyeing $100-a-barrel crude in the not-too-distant future. The U.S. dollar index is firmer early today after being weaker overnight. The U.S. Treasury 10-year note yield is presently fetching 1.817%.

There is no other for U.S. economic data due for release Friday.

Technically, the April gold futures bulls have the slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,825.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the December low of $1,755.40. First resistance is seen at the overnight high of $1,815.80 and then at $1,820.00. First support is seen at this week’s low of $1,785.80 and then at $1,775.00. Wyckoff’s Market Rating: 5.5

March silver futures bears have the firm overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $23.50 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.41. First resistance is seen at Thursday’s high of $22.66 and then at $23.00. Next support is seen at $22.00 and then at $21.41. Wyckoff’s Market Rating: 2.5.