Gold prices are lower and hit a five-week low in early U.S. trading Thursday. The bears have the near-term technical advantage and that is prompting some selling pressure Thursday as the market place gears up for what is arguably the most important economic data point of the month: the U.S. jobs report on Friday morning. August Comex gold was last down $5.50 at $1,289.40 an ounce. Spot gold was last quoted down $6.00 at $1,289.00. December Comex silver last traded down $0.009 at $20.65 an ounce.

Many markets were subdued overnight as traders and investors await Friday’s U.S. Labor Department employment report. The report is forecast to see a rise in non-farm payrolls of 230,000 in July versus up 288,000 in June. Look for active trading in many markets in the immediate aftermath of the report’s release at 8:30 a.m. eastern time.

Wednesday afternoon’s results of the two-day meeting of the Federal Reserve’s Open Market Committee (FOMC) showed the FOMC will continue to taper its monthly bond-buying program (quantitative easing) by slicing another $10 billion per month from the program. The move was not surprising and the markets showed little reaction and quickly digested the data.

In overnight news, the July consumer price index in the European Union rose 0.4%, year-on-year, and is the lowest reading since 2009. The June CPI came in at up 0.5%. These figures are well below the European Central Bank’s target of 2.0% annual inflation in the EU.

Also in European trading, the troubled Portuguese bank, Banco Espirito, saw its stock price fall 40% after the bank reported a record loss in the second quarter.

Argentina is set to default on another sovereign debt obligation after negotiations between creditors and government officials collapsed. This news is not surprising and has had no major markets impact, so far.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cut report, and the Chicago ISM business survey.

The market place is still monitoring geopolitical issues. The European Union and U.S. this week have slapped new and harsher sanctions on Russia. Meantime, the Israel-Hamas conflict is not de-escalating. These matters will continue to be not far from the front burner of the market place in the near term.

Wyckoff’s Daily Risk Rating: 7.0 (Geopolitics are at play in the market place, but for now traders and investors are also a bit numb to those matters.)

(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 $1,295.00 versus the previous P.M. fixing of $1,294.50.

Technically, August gold futures bears have the slight near-term technical advantage as a three-week-old downtrend is in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,312.10. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,270.00. First resistance is seen at the overnight high of $1,297.30 and then at $1,300.00. First support is seen at today’s low of $1,284.50 and then at $1,278.00.  

December silver futures bears have the slight near-term technical advantage as prices are in a three-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $21.21 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of $20.42. First resistance is seen at the overnight high of $20.835 and then at this week’s high of $20.91. Next support is seen at this week’s low of $20.55 and then at the July low of $20.42.

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