Gold Down, Hits 3-Mo. Low, in Wake of Surprisingly Strong US Jobs Data
New York (Nov 6) A surprisingly strong U.S. jobs report pushed gold prices solidly lower and to a three-month low in early U.S. trading Friday. Gold fell below the psychologically important $1,100 level to also produce fresh technical damage. December Comex gold was last down $11.50 at $1,092.50 an ounce. December Comex silver was last down $0.163 at $14.815 an ounce.
The U.S. employment report from the Labor Department showed non-farm payrolls rose by 271,000 in October. The key number was forecast to be up only around 185,000. The U.S. dollar index rallied sharply on the news, while the U.S. stock market saw a bit of selling pressure.
Today’s jobs report seemingly gives the U.S. Federal Reserve a green light to raise interest rates in December. The rest of the world’s major industrial countries would prefer the Fed not raise interest rates so soon, as economies like China, the European Union, Japan and the U.K. are seeing tepid growth at best, with their central banks considering easing their monetary policies.
A feature in the marketplace this week is the resurgent U.S. dollar index. The dollar index is a basket of six major world currencies weighted against the greenback. The USDX hit a 6.5-month high Friday. The dollar has rallied on the prospect of a Fed tightening of U.S. monetary policy sooner rather than later, and Friday’s jobs report strongly bolstered those notions. The Euro currency has slumped sharply recently, as the greenback rallies.
The other U.S. economic report due out Friday includes consumer installment credit.
Technically, gold bears have the solid near-term technical advantage and gained more power today. Prices have been trending lower for the past three weeks. Bulls’ next upside near-term rice breakout objective is to produce a close above solid technical resistance at $1,120.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the July low of $1,073.70. First resistance is seen at $1,100.00 and then at the overnight high of $1,109.70. First support is seen at $1,085.00 and then at $1,080.00.
Silver bears have the near-term technical advantage as prices hit another four-week low Friday. Bulls’ next upside price breakout objective is closing December futures prices above solid technical resistance at $15.50 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 $15.00 and then at $15.20. Next support is seen at the overnight low of $14.745 and then at $14.50.
Source: KitcoNews
