Gold loses early price gains as traders reassess U.S. jobs data

(Kitco News, Fri, Oct. 8th,2021) – Gold prices have lost early gains that saw the yellow metal hit a two-week high, and are now trading near steady in late-morning dealings Friday. The U.S. jobs report that was a mixed bag is driving market action to end the trading week. December gold futures were last up $0.70 at $1,759.90. December Comex silver was last up $0.142 at $22.80 an ounce.

The U.S. employment report from the Labor Department on Friday morning saw the key non-farm jobs number up 194,000, which was a solid miss from the forecast of up 500,000 in September, and follows a revised gain of 366,000 in August. Both months saw misses to the downside from the consensus forecasts. The unemployment rate in August fell to 4.8%. Some prognosticators in the immediate aftermath of the jobs report said the weaker-than-expected non-farm employment numbers in August and September may keep the Federal Reserve from tapering its monetary policy as soon as it wants. Others, however, said the overall upbeat internals of today’s jobs report will not alter the Fed’s trajectory of tapering. But at the least, today’s jobs data injected a bit more uncertainty into the marketplace thinking on the matter. Judging from the reaction of the U.S. Treasury market (yields rising today), bond traders believe the Fed will remain on its “sooner rather than later” track for tightening U.S. monetary policy. That’s also what gold and silver traders are also believing as midday approaches Friday, given gold and silver prices losing their early gains.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are mixed as midday approaches. The U.S. stock index bulls have had a good couple days late this week, and gains on Friday would suggest that the indexes have put in market bottoms. Trader and investor risk appetite is more upbeat late this week as the U.S. Senate agreed on and passed a bill to extend the debt limit to December.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures are up, hit a seven-year high of $80.11 and are presently trading around $79.80 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.607%–the highest level since June.

Technically, December gold futures bears still have the overall near-term technical advantage. However, a four-week-old downtrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,721.10. First resistance is seen at today’s high of $1,782.40 and then at $1,800.00. First support is seen at $1,750.00 and then at this week’s low of $1,745.40.

The silver bears have the firm overall near-term technical advantage, but prices did hit a three-week high overnight and the near-term price downtrend has stalled out. Silver bulls’ next upside price objective is closing December futures prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at today’s high of $23.22 and then at $23.50. Next support is seen at today’s low of $22.435 and then at this week’s low of $22.185.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com