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June 14, 2024
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Precious Metals

Gold price sells off following stronger U.S. jobs report

Gold prices are lower and hit a three-week low in early U.S. trading Friday, following the release of the U.S. employment situation report that showed stronger jobs growth than expected. Silver prices are just modestly down. February gold was last down $10.00 at $2,039.00. March silver was last down $0.027 at $23.065.

Friday morning’s U.S. employment situation report for December showed the key non-farm jobs number in the report up 216,000 versus expectations for a rise of 170,000 and compares to a revised rise of 173,000 seen in the November report. The U.S. unemployment rate in December was 3.7% versus the consensus forecast of 3.8% and a reading of 3.7% in the November report. The report falls into the camp of the U.S. monetary policy hawks, who want to see the Federal Reserve keep its money policy tighter in 2024. The U.S. dollar index is solidly higher and U.S. Treasury yields have up-ticked after the jobs report. Also, bond yields are on the rise again, with the benchmark U.S. Treasury 10-year note yield back above 4% for the first time in almost a month. That suggests the marketplace has backed off a bit on its dovish expectations for U.S. interest rate cuts in the coming months.

Asian and European stock markets were mixed to weaker overnight. U.S. stock index futures are set to open lower when the New York day session begins. Risk appetite in the marketplace is not robust this first week of 2024, amid heightened tensions in the Middle East. A Wall Street Journal headline today reads: “Stock forecasters are on edge over weak start.”

In overnight news, the Eurozone consumer price index in December came in at up 2.9%, year-on-year, versus up 2.4% in the November report. Eurozone producer prices in November were reported down 8.8% year-on-year.

The key outside markets today see the U.S. dollar index solidly higher, continuing this week’s strong rebound. Nymex crude oil prices are higher and trading around $73.00 a barrel. Prices are still in a downtrend on the daily bar chart. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.078%.

Other U.S. economic data due out Friday includes the ISM report on business services and manufacturers’ shipments and inventories.

Technically, the gold futures bulls still have the overall near-term technical advantage but are fading a bit. Prices are still in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in March futures above solid resistance at $2,100.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. 

First resistance is seen at $2,050.00 and then at Thursday’s high of $2,058.10. First support is seen at the overnight low of $2,030.80 and then at $2,025.00. Wyckoff’s Market Rating: 7.0.

The silver bears have the overall near-term technical advantage. A choppy, three-month-old uptrend on the daily bar chart has been negated. Silver bulls’ next upside price objective is closing March 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 November low of $22.26. First resistance is seen at the overnight high of $23.38 and then at $23.75. Next support is seen at $23.00 and then at this week’s low of $22.88. Wyckoff’s Market Rating: 4.0.

Try out my “Markets Front Burner” email report. My next one is due out today and is going to be entitled, “When China sneezes…” Front Burner is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. And it’s free! Sign up to my new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html.

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.

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