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Gold prices back off as U.S. jobs report better than expected

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(Kitco News) - Gold prices are trading modestly down in early U.S. trading Tuesday, following an upbeat U.S. employment report for June that showed more jobs growth than expected and a lower unemployment rate than expected. August gold futures were last down $6.40 an ounce at $1,773.40. September Comex silver prices were last down $0.073 at $18.15 an ounce.

The Labor Department’s employment situation report showed a non-farm payrolls rise of 4,8 million and an unemployment rate of 11.1% in June. The key non-farm payrolls number was expected to be up 3.15 million, with the unemployment rate forecast at 12.4%.

It's a holiday-shortened U.S. trading week, as markets are closed Friday for the Independence Day holiday. Some U.S. markets will close early today. However, today is another very busy for U.S. economic data releases that are likely to move markets. Other important U.S. economic reports out on Thursday include weekly jobless claims, the international trade report, the ISM New York report on business, and manufacturers’ shipments and inventories.

Global stock markets were mostly up in overnight trading. The U.S. stock indexes are pointed toward higher openings when the New York day session begins, with the Nasdaq index hitting a record high overnight. Recent U.S. and global economic data suggests businesses’ recoveries from the Covid-19 pandemic damage to them is more rapid than initially expected. Also, the Federal Reserve’s FOMC minutes released Wednesday afternoon reiterated the Fed will likely continue to work to stimulate the U.S. economy through monetary policy measures. These bullish elements are for now outweighing the bearish specter of a Covid-19 resurgence in many U.S. states that is forcing some of those states to again shut down some of their businesses. However, there are fresh reports that a vaccine for the infection is showing promise.

In overnight news, the Euro zone’s unemployment rate up-ticked a bit in May, to 7.4% from 7.3% in April. The region’s producer price index was also released and came in down 0.6% in May and down 5% year-on-year.

The important outside markets today see Nymex crude oil prices higher and trading around $40.20 a barrel. The U.S. dollar index is weaker early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.7% level.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at this week’s high of $1,807.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,754.00. First resistance is seen at the overnight high of $1,785.50 and then at $1,789.00. First support is seen at this week’s low of $1,767.90 and then at $1,754.00. Wyckoff's Market Rating: 8.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $19.125 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the June low of $17.175. First resistance is seen at the overnight high of $18.07 and then at $18.425. Next support is seen at $18.00 and then at $17.75. Wyckoff's Market Rating: 7.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.