Gold sees solid price gains after downbeat U.S. jobs report

New York (Oct 8) Gold prices are solidly higher and hit a two-week high in early U.S. trading Friday following a weak U.S. employment report for the second month in a row. December gold futures were last up $13.70 at $1,772.80. December Comex silver was last up $0.222 at $22.89 an ounce.

The just-released U.S. employment report from the Labor Department on Friday morning—arguably the most important U.S. data point of the month—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 gain of 235,000 in August. Both months saw misses to the downside from the consensus forecasts. Some prognosticators are already saying the weaker-than-expected job numbers in August and September will keep the Federal Reserve from tapering its monetary policy as soon as it wants to do so.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. 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 and trading around $79.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.586% and overnight climbed above 1.6%--the highest level since June.  

Other U.S. economic data due for release Friday includes the monthly wholesale trade report.

Technically, December gold futures bears still have the slight overall near-term technical advantage. However, a four-week-old downtrend on the daily bar chart has now 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 $1,788.40 and then at $1,800.00. First support is seen at the overnight low of $1,753.60 and then at this week’s low of $1,745.40. Wyckoff's Market Rating: 4.5

The silver bears have the solid overall near-term technical advantage, but prices did hit a two-week high overnight. 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 $23.15 and then at $23.50. Next support is seen at the overnight low of $22.435 and then at this week’s low of $22.185. Wyckoff's Market Rating: 2.5.

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