Gold Pressured By Strong U.S. Jobs Report
(Kitco News) - Gold and silver prices are lower in early U.S. trading Friday, in the wake of a strong U.S. jobs report for May that boosted the U.S. dollar index and also hints at a more aggressive monetary policy from the Federal Reserve. August Comex gold futures were last down $8.80 an ounce at $1,295.90. July Comex silver was last down $0.098 at $16.365 an ounce.
Friday morning’s U.S. jobs report for May saw the key non-farm payrolls number come in at up 223,000, which was much higher than the expected figure of up around 190,000. Wednesday’s ADP jobs report showed a rise of 178,000. Other components of the jobs report were also strong, which suggests the U.S. Federal Reserve can be a bit more aggressive on its pace of raising interest rates.
Gold prices hit their daily lows right after the jobs report, while the U.S. dollar index hit its daily high. However, the gold market has pared its losses that were seen right after the jobs data was released.
World stock markets were mixed overnight, with Asian indexes mixed and European indexes mostly higher. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
In overnight news, worries regarding the financial and political stability of Italy were somewhat assuaged when the two major antiestablishment parties made a deal on a coalition government. This is apparently the better alternative than new elections, according to the sense of the marketplace at present.
The U.S. on Thursday implementing previously announced tariffs on imports of aluminum and steel does have traders and investors worried about a global trade war. Retaliatory tariffs against U.S. products are already being announced from other countries.
The other key “outside market” today finds Nymex crude oil prices lower and trading just above $65.00 a barrel.
Other U.S. economic data due for release Friday includes the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, the global manufacturing PMI, and domestic auto industry sales.
Technically, August gold bears have the slight overall near-term technical advantage. Prices are still in a seven-week-old downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above the May high of $1,332.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,286.80. First resistance is seen at the overnight high of $1,304.80 and then at last week’s high of $1,312.60. First support is seen at today’s low of $1,293.10 and then at the May low of $1,286.80. Wyckoff's Market Rating: 4.5
July 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 $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.07. First resistance is seen at this week’s high of $16.615 and then at last week’s high of $16.74. Next support is seen at this week’s low of $16.31 and then at $16.19. Wyckoff's Market Rating: 4.5.