Gold prices sink following strong U.S. jobs report
(Kitco News) - Gold and silver prices are trading lower in the wake of a very upbeat U.S. economic report that falls squarely into the camp of the U.S. monetary policy hawks, who do not want to see the Federal Reserve continue on its present path of lowering interest rates. February gold futures were last down $11.00 an ounce at 1,472.00. March Comex silver prices were last down $0.129 at $16.935 an ounce.
The U.S. economic data point of the week, if not the month saw Friday morning’s employment situation report for November from the Labor Department show the key non-farm payroll number up a strong 266,000. The number was expected to come in at up around 185,000 jobs. Wednesday’s ADP national employment report for November came in at up just 67,000 jobs, which was a big miss to the downside and had many thinking Friday’s job’s number would be a downside miss, too. October’s payrolls were also revised up modestly.
Asian and European stock indexes were mostly up overnight. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Today’s strong jobs report injected some fresh risk appetite into the marketplace. European equities shrugged off a very downbeat report on German industrial production for October, which come in at down 1.7% from September and down 5.3%, year-on-year. That was the biggest drop in 10 years.
The OPEC oil cartel is meeting late this week and is expected to continue to limit its crude oil production in an effort to keep prices propped up. Crude oil prices have rallied this week on those expectations.
Another markets feature this week is a rally in the British pound to a multi-month high, on notions the U.K. citizens will next week in the general election produce a win for Prime Minister Boris Johnson and his Conservative party.
The key “outside markets” today see the U.S. dollar index up following the jobs report. The USDX hit a four-week low Thursday and the greenback bulls have faded recently. Meantime, Nymex crude oil prices are weaker and trading around $58.00 a barrel.
Other U.S. economic data due for release Friday includes monthly wholesale trade, consumer credit and the University of Michigan consumer sentiment survey.
Technically, the gold bulls and bears are on a level overall near-term technical playing field. A three-month-old downtrend on the daily bar chart has been negated this week. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,500.00. Bears' next near-term downside price breakout objective is pushing futures prices below solid technical support at the November low of $1,453.10. First resistance is seen at $1,475.00 and then at $1,480.00. First support is seen at today’s low of $1,469.80 and then at $1,456.60. Wyckoff's Market Rating: 5.0
March silver futures bulls and bears are on a level overall near-term technical playing field. A three-month-old downtrend on the daily bar chart has been negated. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $16.76. First resistance is seen at this week’s high of $17.415 and then at $17.50. Next support is seen at the November low of $16.76 and then at $16.50. Wyckoff's Market Rating: 5.0.