Gold Loses First Price Gains As Traders Reassess US Jobs Data

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(Kitco News) – Gold prices have lost their initial gains which saw the yellow metal peak in two weeks, and are now trading almost stably in late morning trades on Friday. The mixed US jobs report pushes the market to end the week of trading. December gold futures rose for the last time from $ 0.70 to $ 1,759.90. December’s Comex Silver was up $ 0.142 to $ 22.80 an ounce.

The Department of Labor’s U.S. employment report on Friday morning saw the number of key non-farm jobs rise by 194,000, which was a gross error from the forecast of 500,000 in September, and follows on from a revised gain of 366,000 in August. The two months saw downside failures from consensus forecast. The unemployment rate in August fell to 4.8%. Some prognosticators in the wake of the jobs report said weaker than expected nonfarm employment figures in August and September could prevent the Federal Reserve from cutting monetary policy anytime it wants. Others, however, said the broadly optimistic internals in today’s jobs report will not change the Fed’s reduction path. But at least today’s jobs data has injected a bit more uncertainty into the market’s thinking on the matter. Judging by the reaction of the US Treasury market (yields are rising today), bond traders believe the Fed will stay on track “sooner rather than later” to tighten US monetary policy. This is also what gold and silver traders think heading into noon on Friday, as gold and silver prices lose their initial gains.

Global stock markets were mixed in overnight trading. US stock indices are mixed as we approach midday. The bulls in the US stock index had a few good days this weekend, and Friday’s gains suggest the indexes have hit market lows. The risk appetite of traders and investors is more optimistic this weekend as the US Senate approved and passed a bill to extend the debt limit until December.

The main foreign markets are now seeing the US dollar index decline. Nymex crude oil futures are up, hit a seven-year high of $ 80.11 and are currently trading around $ 79.80 a barrel. Meanwhile, the yield on 10-year US Treasuries currently stands at 1.607%, the highest level since June.

Technically, December gold futures still have the overall short-term technical advantage. However, a four week downtrend on the daily bar chart has been reversed. The Bulls’ next bullish price target is to produce a close above the solid resistance at $ 1,800.00. The bears’ next short-term bearish price target is pushing futures prices under strong technical support to the September low of $ 1,721.10. First resistance is seen at today’s high of $ 1,782.40 and then at $ 1,800.00. First support is seen at $ 1,750.00 and then this week’s low of $ 1,745.40. Wyckoff Market Score: 4.0

Silver bears have the overall short-term technical advantage, but prices hit a three-week high overnight and the short-term price downtrend has stopped. The next bullish price target for Silver Bulls is to close December futures prices above strong technical resistance at $ 24.00 an ounce. The next bearish price target for bears is to close price below strong support at $ 21.00. First resistance is seen at today’s high at $ 23.22 and then at $ 23.50. Next support is seen at today’s low of $ 22.435 and then this week’s low at $ 22.185. Wyckoff market rating: 2.5.