Gold, Silver Prices Hit 3-Mo. Lows Following Upbeat U.S. Data

(Kitco News) - Gold and silver prices are moderately lower and have dropped to more-than-three-month lows in early U.S. trading Thursday. A strong U.S. economic report released this morning only adds to keener trader and investor risk appetite that is keeping safe-haven gold and silver markets under pressure. A higher U.S. dollar index today is also a bearish element for the precious metals markets. June gold futures were last down $7.10 an ounce at $1,288.20. May Comex silver was last down $0.162 at $14.935 an ounce.

The weekly U.S. jobless claims report showed claims falling by 10,000, which now puts claims at the lowest level in 50 years. Gold and silver prices hit their daily lows following the report. The U.S. dollar index moved to its daily high on the news.

Asian and European stock indexes were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The stock markets are seeing corrective pullbacks from recent gains that pushed the U.S. stock indexes to 5.5-month highs this week.

Traders and investors worldwide are still generally upbeat, due in part to optimism the U.S. and China will soon reach a trade deal. Reports said President Trump will today meet with Chinese Vice Premier Liu He in Washington. He is part of the Chinese trade delegation in town. Reports say the U.S. and China are very close to a trade deal. The marketplace is wondering if Trump will today mention a summit meeting with Chinese President Xi Jinping to seal the trade deal.

In other overnight news, India’s central bank lowered its main interest rate for the second time this year, to 6.0% from 6.25%.

Germany’s manufacturing orders dropped sharply in February, at down 4.2% from January. Forecasts were calling for a 0.5% rise in the period.

A European report just out said Italian economic growth for 2019 has been reduced from 1.0% to 0.1%. This could impact the European markets more significantly, given Italy’s already fragile financial system.

Market watchers are looking ahead to the U.S. Labor Department’s employment report for March, which is due out Friday morning. It’s arguably the most important economic data point of the month. The key non-farm payrolls number in the report is forecast to be up 175,000 in March, with the unemployment rate expected to remain at 3.8%. Wednesday’s precursor report, the ADP national employment report for March, showed a gain of 129,000 jobs, which was a significant downside miss. The payrolls number was forecast to be up 173,000. This suggests Friday’s more important jobs report could also be a miss to the downside.

The key outside markets today see the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are near steady and trading around $62.50 a barrel.

U.S. economic reports due for release Thursday include the weekly jobless claims report and the Challenger job-cuts report. There are also several Federal Reserve officials scheduled to give speeches today.

Technically, the gold bulls still have the overall near-term technical advantage but have faded recently and need to show fresh power soon. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the March high of $1,330.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,287.50. First resistance is seen at this week’s high of $1,301.70 and then at $1,305.00. First support is seen at $1,280.00 and then at $1,275.00. Wyckoff's Market Rating: 6.0

May silver futures bears have the slight overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the March high of $15.65 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is seen at this week’s high of $15.19 and then at 15.315. Next support is seen at the overnight low of $14.89 and then at $14.75. Wyckoff's Market Rating: 4.5.