Gold prices are lower in early U.S. trading Friday, pressured by a surprisingly strong U.S. jobs report. Traders and investors were leaning the other way, looking for weaker-than-expected employment data. More risk appetite in the market place this week is also a negative for safe-haven gold. April gold was last down $16.80 at $1,335.00 an ounce. Spot gold was last quoted down $16.40 at $1,334.50. May Comex silver last traded down $0.587 at $20.955 an ounce.

The February employment report from the U.S. Labor Department showed a surprising gain of 175,000 in non-farm jobs. The consensus forecast was for a rise of around 150,000. However, some weaker U.S. economic data released earlier this week made traders and investors think the non-farm jobs number could be well below the consensus forecast. This latest jobs report suggests the Federal Reserve will stay on track with its “tapering” program that is winding down the monthly bond purchases from the U.S. central bank.

Overnight trade in European and Asian markets was more subdued ahead of the U.S. jobs report, which is the big economic data point of the week.

A feature in the market place late this week is the surge in the Euro currency against the U.S. dollar. The Euro is at a 2.5 year high versus the greenback. The U.S. dollar index is at a 4.5-month low. These currency moves have been a bullish underlying factor for gold and other raw commodity markets that are priced in U.S. dollars. However, the jobs report did lift the U.S. dollar index up from its daily low Friday morning.

The situation in Ukraine has for now changed from a serious geopolitical matter to more of a regional issue of lesser significance—from a market place perspective.  However, there is a move among Crimea citizens to have a referendum to have their region annexed by Russia. The Ukraine parliament, the European Union and the U.S. say they will not recognize any a vote on the matter. A vote on the issue is scheduled for March 16, and that could be the next flashpoint in the region.

Reports overnight said a major Chinese solar equipment maker defaulted on a corporate bond payment—the first time such has occurred from a Chinese company. Most would have thought the Chinese government would have stepped in to rescue the ailing domestic business. Others suggest the Chinese government is working on weeding out ailing businesses and employing more capitalist principles, including letting weak businesses fail. The corporate bond default has raised concerns about the overall health of the Chinese economy.

In other overnight news, German industrial output rose 0.8% in January, month-on-month, it was reported Friday. That figure was slightly higher than market expectations. The European Union’s largest economy is off to a good start in 2014.

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

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has de-escalated—for now.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fix is $1,348.25 versus the P.M. fixing of $1,345.25.

Technically, April gold futures prices are still in a two-month-old uptrend on the daily bar chart. The gold bulls still have the near-term technical advantage, but do not want to see a technically bearish weekly low close on Friday. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at this week’s high of $1,355.00. Bears' next near-term downside breakout price objective is closing prices below technical support at last week’s low of $1,318.70. First resistance is seen at the February high of $1,345.60 and then at $1,350.00. First support is seen at this week’s low of $1,330.70 and then at $1,325.00.  

May silver futures bears gained the slight near-term technical advantage Friday as prices fell to a fresh three-week low. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $21.74 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.63. First resistance is seen at $21.00 and then at $21.25. Next support is seen at Friday’s low of $20.805 and then at $20.63.

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