Gold Backs Off On Profit-Taking; U.S. Jobs Report On Deck

Jim Wyckoff  

Thursday June 01, 2017 13:50

(Kitco News) - Gold prices ended the U.S. day session lower Thursday, on profit-taking from recent gains that saw prices hit a four-week high Wednesday. The U.S. ADP jobs report that was a big miss to the upside today was also bearish for the precious metals markets. The U.S. dollar index was also higher Thursday, and that was a daily negative for the metals. August Comex gold was last down $6.10 an ounce at $1,269.30. July Comex silver was last down $0.151 at $17.255 an ounce.

The ADP jobs report for May showed a reading of up 253,000. A rise of around 180,000 was expected by the marketplace. The report falls into the camp of the U.S. monetary policy hawks who want to see interest rates rise sooner rather than later.

Now traders and investors are looking forward to Friday’s more important U.S. employment report for May from the Labor Department. The key non-farm payrolls number for May is forecast to come in at up around 210,000. However, the stronger ADP number on Thursday has many thinking Friday’s non-farm jobs number could be a miss to the upside, too. Such would also likely be bearish for the precious metals.

China saw some downbeat economic data Thursday. The unofficial China manufacturing purchasing managers index (PMI) came in at 49.6 in May versus the forecasts for a reading of 50.1. This news was another underlying negative for the precious metals markets, as China is the world’s largest raw commodity importer.

The “outside markets” on Thursday saw Nymex crude oil futures prices higher on some short covering from recent selling pressure. The oil market bears have the overall near-term technical advantage. Meantime, the U.S. dollar index was higher today, supported in part by the stronger ADP number. The greenback bears are still in near-term technical control as dollar index prices are in a nearly three-month-old downtrend.

Technically, August gold futures prices closed nearer the session high today after hitting a four-week high and closing at a bullish monthly high close on Wednesday. The gold bulls still have the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at this week’s high of $1,276.80 and then at $1,280.00. First support is seen at this week’s low of $1,261.80 and then at 1,256.00. Wyckoff's Market Rating: 6.0

July silver futures prices closed nearer the session high today. The silver market bulls and bears are on a level overall near-term technical playing field. Prices are still in a three-week-old uptrend on the daily bar chart, but now just barely. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at this week’s high of $17.465 and then at $17.75. Next support is seen at $17.00 and then at $16.84. Wyckoff's Market Rating: 5.0.

July N.Y. copper closed up 60 points at 258.60 cents today. Prices closed nearer the session high today. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 270.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 247.25 cents. First resistance is seen at today’s high of 259.60 cents and then at the May high of 261.95 cents. First support is seen at today’s low of 256.15 cents and then at this week’s low of 253.90 cents. Wyckoff's Market Rating: 5.0.