Heavy pressure on gold and silver prices after strong US jobs data

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(Kitco News) – Gold and silver prices fell sharply in early US trade on Friday, following a surprisingly strong US employment report that could force the Federal Reserve to become more aggressive in tightening monetary policy. The US dollar index and US Treasury yields jumped on jobs news, which in turn helped push gold and silver prices lower. October gold futures were last down $21.70 at $1,774.70. Comex silver futures for September were down $0.507 to $19.615 an ounce.

This morning’s US jobs report for July showed a very strong 528,000 rise in non-farm payrolls growth. An increase of about 260,000 was expected. The June jobs report showed an increase of 372,000 non-farm jobs. The overall unemployment rate fell in July to 3.5% from 3.6% in June. After today’s strong job numbers, a market commentator on Bloomberg Radio said, “The Fed’s protectionist axis won’t happen.”

Global stock markets were flat to a slight uptick overnight. US stock indices are pointing to lower openings at the start of the New York session, selling off after a strong non-farm payroll number.

The market remains a bit unstable amid rising tensions between the United States and China, the world’s two largest economies, after US House Speaker Nancy Pelosi’s visit to Taiwan this week. China is conducting fierce military exercises around Taiwan and has also announced sanctions against Nancy Pelosi and her family. US Secretary of State Blinken said China’s military exercises near Taiwan are a worrying escalation.

Today, major offshore markets are seeing NYMEX crude oil prices near stability and are trading around $88.50 per barrel. On Thursday, crude oil hit a 4.5-month low. The US dollar index rose sharply in early trading in the US and made a big upward move after the jobs report. The yield on the 10-year US Treasury is around 2.85%.

Other US economic data due for release on Friday includes the Consumer Credit Report.

Technically speaking, the October Gold Bears futures contract has the overall technical advantage in the near term. However, there is still a fresh uptrend in the prices on the daily bar chart to indicate that the bottom of the market is in place. The next bullish price target for the bulls is to produce a close above the solid resistance at $1,850.00. The next near-term downside price target for the bears is pushing futures prices below strong technical support at the July low of $1,686.30. We notice the first resistance at this week’s high at $1,801.00 and then at $1,825.00. First support is seen at the Thursday low at $1,769.50 and then this week’s low at $1,759.70. Wyckoff Market Rating: 3.0

24 hour silver chart [ Kitco Inc. ]

The September silver futures bears have the overall technical advantage in the near term. However, recent price gains point to a bottom in the market. The next bullish price target for the silver bulls is to close prices above the strong technical resistance at $21.00. The next target for the bears downtrend price is a price close below the strong support level at $19.00. We see first resistance at $20.00 and then this week’s high at $20.51. Next support appears at $19.40 and then $19.00. Wyckoff Market Rating: 3.0.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, Kitco Metals Inc. cannot. Nor does the author guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to conduct any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. does not accept The author of this article will be liable for losses and/or damages arising from the use of this publication.

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