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Price gains in gold, silver after weak U.S. jobs report

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(Kitco News) - Gold and silver prices are higher up and hit four-week highs in early U.S. trading Friday, following a downbeat U.S. employment report for August. Both metals have backed down from their daily highs seen in the immediate aftermath of the report, however. The employment situation report from the Labor Department showed the key non-farm payrolls component up only 235,000 compared to a rise of 720,000 that was expected by the marketplace. The unemployment rate was 5.2% in August—in line with expectations and compares with the 5.4% unemployment rate seen in the July report. July non-farm payrolls were revised up significantly from an already strong number, so that may be one reason gold and silver prices backed off their daily highs. October gold futures were last up $11.80 at $1,821.20. December Comex silver was last up $0.327 at $24.24 an ounce.

Global stock markets were mixed overnight. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins, with S&P 500 and Nasdaq futures at or near record highs.

In overnight news, U.S. Democratic Senator Joe Manchin on Thursday called for a "strategic pause" for President Biden's $3.5 trillion tax and spending package. In a Wall Street Journal op-ed, Manchin said rising inflation and a soaring national debt necessitate a go-slow approach and a "significantly" smaller plan. Manchin is a key vote in the evenly divided Senate.

Reports say China will introduce yuan-denominated commodities futures trading that is open to foreign traders and investors. China's State Council announced Friday it plans to offer more commodities futures, including shipping contracts. China has been gradually opening up futures trading on its commodities futures, with the goal of having more global control of commodity pricing. Foreign investors currently have access to China futures markets including crude oil, iron ore, rubber and bonded copper. The official statement announced plans to accelerate the introduction to overseas traders by building an "international commodity futures market priced and settled in renminbi."

The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil futures prices are firmer and trading around $70.25 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.3%.  

Other U.S. economic data due for release Friday includes the U.S. services purchasing managers index (PMI), the ISM report on business services and the global services PMI.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures bulls have the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the July high of $1,836.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at today's high of $1,830.20 and then at $1,836.20. First support is seen at the overnight low of $1,809.00 and then at this week's low of $1,801.30. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the slight overall near-term technical advantage but bulls are making headway and working on a price uptrend on the daily chart. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at today's high of $24.44 and then at $24.75. Next support is seen at $24.00 and then at this week's low of $23.775. Wyckoff's Market Rating: 4.5.

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.