Comex gold futures prices are trading moderately higher Monday morning and are seeing short covering and bargain-hunting buying interest following a weaker-than-expected U.S. employment report that was released Friday morning when most markets were closed. Gains in gold are being limited by bearish “outside markets” as crude oil prices are lower and the U.S. dollar index is firmer. June gold last traded up $11.80 at $1,641.90 an ounce. Spot gold was last quoted up $9.90 an ounce at $1,641.50. May Comex silver last traded down $0.08 at $31.65 an ounce.
The market place is quieter Monday as the London markets and some other European markets remained closed for the Easter holiday.
Friday’s more downbeat U.S. jobs data was mildly supportive for the gold because it does keep the specter of another round of quantitative easing from the U.S. Federal Reserve on the table, albeit the argument for such is still a weak one at this point. Fed Chairman Ben Bernanke speaks at a conference in Atlanta Monday, and traders will more closely scrutinize his remarks in the wake of the jobs report Friday.
The U.S. dollar index is trading slightly higher Monday morning. The stronger greenback just recently is a bearish underlying factor for the precious metals. Meantime, crude oil prices are lower Monday following the weak jobs report and some fresh, weak economic data coming out of China. The weaker near-term technical posture of the crude oil market and firmer posture of the U.S. dollar index are negatives for gold and silver.
U.S. economic data due for release Monday includes the Chicago Fed Midwest manufacturing index and the employment trends index.
Technically, chart damage was inflicted in gold last week. A five-week-old downtrend is in place on the daily bar chart. The bulls’ next near-term upside price breakout objective is to produce a close in June gold above solid technical resistance at last week’s high of $1,685.40. Bears’ next near-term downside price objective is closing prices below psychological support at $1,600.00. First resistance is seen at the overnight high of $1,648.20 and then at $1,650.00. First support is seen at the overnight low of $1,636.70 and then at $1,629.80.
May silver bulls are also fading, technically. A five-week-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $33.295 an ounce. The next downside price breakout objective for the bears is closing prices below major psychological support at $30.00. First resistance is seen at the overnight high of $32.10 and then at $32.50. Next support is seen at $31.50 and then at Thursday’s low of $31.175.