Gold Weaker Following Strong U.S. Jobs Growth

(Kitco News) - Gold prices aremodestly lower in early U.S. trading Friday, in the immediate aftermath of avery upbeat U.S. jobs report that falls into the camp of the U.S. monetarypolicy hawks, who want to see interest rates continue to ratchet higher. Goldprices had already been under some pressure prior to the report, on a normalcorrective pullback from Thursday’s good gains. December gold futures were lastdown $5.00 an ounce at $1,233.60. December Comex silver was last down $0.012 at$14.76 an ounce.

U.S.non-farm payrolls in October rose by a much-higher-than-expected 250,000.Forecasts were calling for a rise of 188,000. The overall U.S. unemploymentrate held steady at 3.7%. Average hourly earnings were up 0.18 percent, for a3.1% annual increase.

Globalstock markets were mostly higher overnight. U.S. stock indexes are pointedtoward higher openings when the New York day session begins. Trader andinvestor attitudes are upbeat amid recent proclamations by U.S. President Trumpand Chinese President Xi Jinping that suggest the world’s two largest economiesare coming closer together to at least formal negotiations on trade. Trump lateThursday tweeted he had a “long and very good” conversation with Xi. Otherreports said Trump has asked his advisors to draw up a trade agreement withChina. This is the most positive rhetoric coming from both sides in months.

TheChinese yuan also gained against the U.S. dollar on the China-U.S. tradedevelopments.

Focusin the U.S. is turning to next week’s mid-term elections, which many believewill be a referendum on the performance of President Trump. Gains by theDemocrats would likely be bearish for the U.S. stock market.

Thekey outside markets today see the U.S. dollar index lower again following solidlosses Thursday. The USDX is seeing a normal corrective pullback after hittinga 16-month high on Wednesday. Meantime, December Nymex crude oil prices areslightly weaker after hitting a 4.5-month low on Thursday, and are presently tradingaround $63.50 a barrel.

OtherU.S. economic data due for release Friday includes the international tradereport, manufacturers’ shipments and inventories and the global manufacturingpurchasing managers index.

Technically,gold bulls and bears are on a level overall near-term technical playing field.Bulls’ next upside price objective is to produce a close in December futuresabove solid resistance at the October high of $1,246.00. Bears' next near-termdownside price breakout objective is pushing prices below solid technicalsupport at $1,200.00. First resistance is seen at this week’s high of $1,239.30and then at $1,246.00. First support is seen at $1,225.00 and then at $1,220.00.Wyckoff's Market Rating: 5.0

Decembersilver futures bears have the overall near-term technical advantage, but thebulls gained some strength after Thursday’s big gains, to suggest the markethas put in a bottom. Silver bulls' next upside price breakout objective isclosing prices above solid technical resistance at $15.00 an ounce. The nextdownside price breakout objective for the bears is closing prices below solidsupport at the September low of $13.965. First resistance is seen at $14.88 andthen at the October high of $14.95. Next support is seen at the overnight lowof $14.655 and then at $14.50. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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