(Kitco News) – Gold prices are modestly lower in early U.S. trading Friday, in the immediate aftermath of a very upbeat U.S. jobs report that falls into the camp of the U.S. monetary policy hawks, who want to see interest rates continue to ratchet higher. Gold prices had already been under some pressure prior to the report, on a normal corrective pullback from Thursday’s good gains. December gold futures were last down $5.00 an ounce at $1,233.60. December Comex silver was last down $0.012 at $14.76 an ounce.
U.S. non-farm payrolls in October rose by a much-higher-than-expected 250,000. Forecasts were calling for a rise of 188,000. The overall U.S. unemployment rate held steady at 3.7%. Average hourly earnings were up 0.18 percent, for a 3.1% annual increase.
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trader and investor attitudes are upbeat amid recent proclamations by U.S. President Trump and Chinese President Xi Jinping that suggest the world’s two largest economies are coming closer together to at least formal negotiations on trade. Trump late Thursday tweeted he had a “long and very good” conversation with Xi. Other reports said Trump has asked his advisors to draw up a trade agreement with China. This is the most positive rhetoric coming from both sides in months.
The Chinese yuan also gained against the U.S. dollar on the China-U.S. trade developments.
Focus in the U.S. is turning to next week’s mid-term elections, which many believe will be a referendum on the performance of President Trump. Gains by the Democrats would likely be bearish for the U.S. stock market.
The key outside markets today see the U.S. dollar index lower again following solid losses Thursday. The USDX is seeing a normal corrective pullback after hitting a 16-month high on Wednesday. Meantime, December Nymex crude oil prices are slightly weaker after hitting a 4.5-month low on Thursday, and are presently trading around $63.50 a barrel.
Other U.S. economic data due for release Friday includes the international trade report, manufacturers’ shipments and inventories and the global manufacturing purchasing managers index.
Technically, gold bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the October high of $1,246.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at this week’s high of $1,239.30 and then at $1,246.00. First support is seen at $1,225.00 and then at $1,220.00. Wyckoff’s Market Rating: 5.0
December silver futures bears have the overall near-term technical advantage, but the bulls gained some strength after Thursday’s big gains, to suggest the market has put in a bottom. 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 the September low of $13.965. First resistance is seen at $14.88 and then at the October high of $14.95. Next support is seen at the overnight low of $14.655 and then at $14.50. Wyckoff’s Market Rating: 3.0.
By Jim Wyckoff
For Kitco News