Gold Gains Following Less Robust U.S. Jobs Report

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December 7, 2018 2:22pm NYSE:GLD


From Jim Wyckoff: (Kitco News– Gold prices are moderately up and hit a six-week high in early U.S. trading Friday, in the wake of a U.S. jobs report that did not meet market expectations on the key jobs-growth component. February gold futures were last up $5.50 an ounce at $1,249.10. March Comex silver was up $0.096 at $14.605 an ounce.

What is arguably the most important U.S. economic report of the month, the Labor Department Employment Situation Report for November, saw the key non-farm jobs number come in at up 155,000, which was well below the consensus forecast of up 198,000. However, the October non-farm jobs number was revised significantly up from its initial reading, to mitigate today’s miss on the downside in the November report. Still, this report leans slightly in favor of the U.S. monetary policy doves who would prefer the Federal Reserve tighten money policy at a slower pace.

World stock markets were mixed but stable overnight. U.S. stock indexes are pointed toward slightly weaker openings when the New York day session begins.

There is still some anxiety in the world marketplace Friday, following the news Thursday that Chinese tech giant Huawei’s chief financial officer was arrested in Canada, on behalf of the U.S., and the U.S wants to extradite her. China has called on Canada to release her, ahead of her scheduled hearing on extradition to the U.S. today. This matter has sparked fears U.S.-China trade tensions could rise further despite the recent agreed-upon truce.

In overnight news, the Euro zone economy grew at a paltry rate of 1.6% in the third quarter, year-on-year, which was slightly less than forecast.

The key outside markets today find the U.S. dollar index weaker following the somewhat downbeat U.S. jobs report. Meantime, Nymex crude oil prices are higher. The OPEC oil cartel is meeting in Vienna, Austria again today. Reports said OPEC heavyweight Saudi Arabia has not agreed to a production cut and is now skeptical an agreement can be reached. This has many crude oil market watchers wondering about any collective production cut being extended, after most reckoned such would be the case before the meeting began.

Other U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey, monthly wholesale trade and consumer credit. There are also a couple of Federal Reserve officials speaking today.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bulls and bears are on a level overall near-term technical playing field, but the bulls have momentum on their side. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the October high of $1,252.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of $1,216.80. First resistance is seen at $1,252.00 and then at $1,260.00. First support is seen at $1,240.00 and then at $1,235.80. Wyckoff’s Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bears still have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at this week’s high of $14.745 and then at $15.00. Next support is seen at this week’s low of $14.28 and then at last week’s low of $14.115. Wyckoff’s Market Rating: 3.0.

The SPDR Gold Shares (GLD) was trading at $118.06 per share on Friday afternoon, up $0.92 (+0.79%). Year-to-date, GLD has declined -4.52%, versus a -0.49% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #1 of 35 ETFs in the Precious Metals ETFs category.

This article is brought to you courtesy of Kitco.

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