(Kitco News) - Gold prices are solidly up and hit contract/record highs in early U.S. trading Friday, following an important U.S. economic report that showed weakness. December gold was last up $35.90 at $3,641.60. December silver prices were up $0.483 at $41.90.
The just-released August U.S. jobs report from the Labor Department showed the key nonfarm payrolls number rise only 22,000 versus expectations for up 75,000. The unemployment rate came in at 4.3%, which was in line with market expectations. The report falls squarely into the camp of the U.S. monetary policy doves, who want lower interest rates faster. After today’s jobs report, the marketplace is now factoring in three quarter-point rate cuts from the Federal Reserve yet this year.
U.S. stock indexes are pointed toward firmer openings today in New York. Global stock indexes were mixed overnight.
The key outside markets today see the U.S. dollar index solidly lower and hit a five-week low, while crude oil futures are also down and trading around $62.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.099% and down from just before the jobs report.
In other news, Canada and the U.S. agreed to hold technical talks on sectoral tariffs after officials met with Commerce Secretary Howard Lutnick. The talks are focused on reaching common understandings about options that may form a series of small deals to put Canada in a better position, said Canadian cabinet minister Dominic LeBlanc. Canada is facing U.S. tariffs on its steel, aluminum, auto and lumber exports. On Wednesday, Canadian Prime Minister Mark Carney told reporters he had a “very constructive” conversation with President Trump earlier in the week and believes they can reach agreements on some tariff-affected industries.
President Trump has signed an executive order implementing a U.S. trade agreement with Japan, with a maximum 15% tariff on most of Japan’s products. The deal includes a promise that Japan will create a $550 billion U.S. investment fund, and the U.S. will lift certain tariffs on aircraft and aircraft parts as well as generic pharmaceuticals. Relief for aerospace and automobile imports will become effective within seven days, according to the order. The news lifted market sentiment in Asia overnight.
Crude oil futures prices have fallen late this week ahead of an OPEC-plus meeting that begins Sept. 7. Energy analysts think the oil cartel may sign off on another crude oil supply hike. The alliance will hold a virtual meeting Sunday to decide its next move after completing the restart of 2.5 million barrels a day of idled crude oil supply at its previous gathering. “If the eight OPEC-plus countries were to agree on another production increase, we believe this would place significant downward pressure on oil prices,” Commerzbank analysts Barbara Lambrecht and Carsten Fritsch wrote in a note and as reported by Bloomberg. “After all, there is already a significant risk of a supply surplus.”
Technically, December gold futures bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,500.00. First resistance is seen at $3,650.00 and then at $3,675.00. First support is seen at $3,600.00 and then at Thursday’s low of $3,573.70. Wyckoff's Market Rating: 9.0.
December 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 $45.00. The next downside price objective for the bears is closing prices below solid support at $38.00. First resistance is seen at this week’s high of $42.29 and then at $43.00. Next support is seen at $41.00 and then at this week’s low of $40.555. Wyckoff's Market Rating: 8.5.
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