Gold sees choppy price action after mixed U.S. jobs report
Welcome to Kitco News' 2022 outlook series. The new year will be filled with uncertainty as the Federal Reserve looks to pivot and tighten its monetary policies. At the same time, the inflation threat continues to grow, which means real rates will remain in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.
(Kitco News) - Gold futures prices are near steady and seeing volatile trading in early U.S. action Friday after a U.S. jobs report that showed mixed components. February gold futures were last up $1.40 at $1,789.90 and March Comex silver was last down $0.05 at $22.15 an ounce.
Friday morning's U.S. employment situation report for December saw its key non-farm payrolls component show a rise of 199,000, after a rise of 210,000 in the November report. The marketplace expected a rise of around 425,000 in the December number. However, the overall unemployment rate was 3.9% versus an expected rate of 4.1% and compares to 4.2% reported in the November report. Other components were also upbeat for the jobs report, despite the downbeat non-farm jobs number. The average hourly earnings number was a bit hot, which plays into the rising inflation notions.
Other markets showed no major initial reactions to the report.
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
In overnight news, the Euro zone's consumer price index for December came in at up 5.0%, year-on-year, versus a reading of up 4.9% in November and expectations for a rise of 4.7%. The December number is a record high inflation rate for the Euro zone. Said Bloomberg in a morning dispatch: "Investors concerned about price rises around the world got more news to back their positions when euro-area inflation surprised by quickening to an annual 5% in December, defying expectations for a slowdown. From Asia, to the U.K., and North and South America, price pressures are dominating the outlook. Despite the global nature of the rise in inflation, it seems likely that 2022 will be a year of divergent central bank responses, with the European Central Bank and Bank of Japan expected to keep rates at rock-bottom levels while their peers tighten."
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The key "outside markets" today see Nymex crude oil futures prices higher, at a two-month high and trading around $80.15 a barrel. The U.S. dollar index is weaker early today. The yield on the U.S. 10-year Treasury note is presently fetching 1.733%. U.S. bond yields have been on the rise for three weeks and have taken a big jump this week.
Other U.S. economic data due for release Friday includes the consumer credit report.
Technically, the February gold futures bulls and bears are on a level overall near-term technical playing field. Bulls' next upside price objective is to produce a close in February futures above solid resistance at this week's high of $1,833.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the December low of $1,753.00. First resistance is seen at $1,800.00 and then at Thursday's high of $1,811.60. First support is seen at $1,775.00 and then at $1,770.00. Wyckoff's Market Rating: 5.0
March silver futures bears have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the December high of $23.48 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.41. First resistance is seen at $22.50 and then at Thursday's high of $22.85. Next support is seen at $21.75 and then at $21.41. Wyckoff's Market Rating: 2.0.