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Gold price weaker following stronger U.S. jobs report

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(Kitco News) - Gold and silver prices are a bit lower in early U.S. trading Friday, in the wake of a stronger-than-expected U.S. employment report for May, which falls into the camp of the U.S. monetary policy hawks. However, the gold and silver markets did not react strongly to the better jobs data. August gold was last down $6.40 at $1,989.10 and July silver was down $0.102 at $23.885.

The Labor Department’s just-released employment situation report for May showed the key non-farm payrolls number up a solid 339,000; the number was seen coming in at up 190,000 and compares to the April non-farm jobs number of up a revised 294,000. The overall unemployment rate did up-tick to 3.7% in May from 3.4% in April.

Traders and investors are still buzzing about the Wall Street Journal report Thursday that said the Fed is likely to pause in its interest-rate-hiking cycle at the June FOMC meeting, before raising rates again later this summer. That’s a shift from the consensus marketplace belief just recently that the Fed would again raise rates at the June FOMC meeting. However, a “sizzling jobs report” on Friday would likely throw cold water on the Fed pause, said the WSJ report. Today’s jobs report was stronger, but it’s questionable the report can be considered “sizzling” given the uptick in the overall jobless rate. Reads a Barrons headline this morning: “A Fed pause now looks likely, but don’t mistake it for a pivot.”

Asian and European stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The general marketplace has breathed a sigh of relief after the U.S. Senate passed the government debt-ceiling-extensions bill, following House passage earlier this week. The bill will now be signed by President Biden.

The key outside markets today see the U.S. dollar index slightly higher after the jobs report, after trading weaker overnight. Nymex crude oil prices are higher and are trading around $71.80 a barrel. The OPEC-plus oil cartel meets this weekend. While there seems to be a widely held view the group won't announce any further production cuts, it's worth noting that the same was true at the last meeting and then the group announced cuts of roughly another million barrels, notes analyst Craig Erlam of OANDA. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching around 3.7.  

There is no other U.S. economic data due for release Friday.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the overall near-term technical advantage. A downtrend on the daily bar chart has stalled out. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $2,050.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,949.60. First resistance is seen at this week’s high of $2,000.70 and then at $2,007.00. First support is seen at Thursday’s low of $1,970.10 and then at $1,960.00. Wyckoff's Market Rating: 6.5.

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls and bears are back on a level overall near-term technical playing field. A downtrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the May low of $22.785. First resistance is seen at today’s high of $24.12 and then at $24.40. Next support is seen at Thursday’s low of $23.335 and then at $23.00. Wyckoff's Market Rating: 5.0.

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.