The just-released February U.S. employment situation report from the Labor Department showed a non-farm payrolls gain of 311,000. The number was expected to show a rise of 225,000 jobs, following a mammoth rise of 517,000 in the January report. As the marketplace sees it, the wages component of the U.S. jobs report was tamer than expected, which has apparently mitigated the higher-than-expected rise in non-farm payrolls.
There is keener risk aversion in the marketplace to end the trading week, and that is likely prompting some safe-haven demand for gold and silver. Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward mixed to weaker openings when the New York day session begins.
All week long the marketplace reckoned the U.S. jobs report Friday morning would be the main focal point of the week. However, a major U.S. financial institution is in big trouble and the marketplace is anxious. SVB Financial, the holding company for Silicon Valley Bank and the 16th largest U.S. commercial bank, dropped 60% in stock value after an emergency $2.25 billion capital increase to cover $1.8 billion in losses on its $21 billion bond portfolio. The bank is also a big player in crypto currencies, which has cryptos under pressure late this week. A Barron’s headline today reads: “Bitcoin plunges below $20,000 with little reason to buy; it could get worse fast.”
Said broker SP Angel in an email dispatch: “Markets look vulnerable to further shocks as the Silicon Valley Bank collapse in California lends weight to a risk-off strategy. To quote Warren Buffett: “Only when the tide goes out do you discover who’s been swimming naked.’ Every institution holding treasuries is now sitting on paper losses and will be forced to crystalize real losses if required to sell. Shares in JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, the largest U.S. lenders by assets, all fell by between 4.1% and 6.2%.”
Added Criag Erlam of OANDA: “Ultimately, what we’re seeing today is a very defensive response to a series of events that have left investors with many more questions than answers, and fearing further ripple effects in the financial sector. It’s understandable but yet unclear how long that will last and whether it will worsen.”
The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are weaker and trading around $75.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.847%.
Other U.S. economic data due for release Friday includes the monthly Treasury budget statement.
Technically, the gold futures bulls and bears are back on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,875.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at $1,850.00 and then at the March high of $1,864.40. First support is seen at the overnight low of $1,830.00 and then at $1,825.00. Wyckoff’s Market Rating: 5.0
The silver bears have the firm overall near-term technical advantage. Prices are in a steep five-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing May futures prices above solid technical resistance at $21.50. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.505 and then at $21.00. Next support is seen at the overnight low of $19.945 and then at $19.50. Wyckoff’s Market Rating: 3.0.