(Kitco News) – Gold prices are modestly down in early U.S. trading Friday, following a U.S. employment report that was slightly stronger than market expectations. The U.S. dollar index rallied on the upbeat jobs data. December gold futures were last down $3.00 an ounce at $1,201.40. December Comex silver was last down $0.011 at $14.17 an ounce.
Arguably the most important U.S. economic report of the month showed the Labor Department’s employment situation report for August and its non-farm payrolls component come in at up 201,000. Forecasts called for a rise of 190,000, on average. The overall unemployment rate was 3.9% in August from 3.8% in July.
World stock markets were mixed but mostly weaker overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins.
Emerging stock markets have slipped into bear territory, according to a closely watched index—the MSCI Emerging Markets Index. The index has dropped 20% from its recent high. There are still lingering worries about eroding emerging markets and secondary currencies creating a contagion to impact larger currencies and financial markets.
In overnight news, the Euro zone’s second-quarter GDP growth came in unrevised at up 0.4% from the first quarter. Year-on-year, GDP was up 2.1% versus the last annual estimate of up 2.2%.
The key outside markets today find the U.S. dollar index firmer. Meantime, Nymex crude oil prices are near steady but market action this week in crude suggests the oil bulls have run out of gas and that a near-term market top is in place.
There is no other major U.S. economic data due for release Friday.
Technically, gold bears have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close in December futures above solid resistance at last week’s high of $1,220.70. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the August low of $1,167.10. First resistance is seen at this week’s high of $1,212.70 and then at $1,220.70. First support is seen at this week’s low of $1,195.10 and then at $1,189.50. Wyckoff’s Market Rating: 2.5
December silver futures bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at $14.405 and then at Tuesday’s high of $14.59. Next support is seen at this week’s low of $14.035 and then at $14.00. Wyckoff’s Market Rating: 1.5.
By Jim Wyckoff
For Kitco News