Gold prices rose sharply according to “Goldilocks” US jobs report

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(Kitco News) – Gold and silver prices were up sharply in early US trade on Friday, buoyed by a US jobs report that landed in the sweet spot of market expectations for the report. Silver hit a three-week high. Strong gains in crude oil prices and a weaker US dollar index are also bullish external market forces for the metals on the day. Short covering by futures traders will be offered in both precious metals markets at the end of the trading week. Gold in December was last up $28.40 to $1,659.60 and silver was last up $0.785 to $20.22 in December.

The Labor Department’s just-released monthly US employment report for October showed that nonfarm payrolls rose by 261,000, ahead of the expected 205,000 increase and compares to the 263,000 increase in the September report. Gold prices contributed to their solid overnight gains following the report’s release as analysis says this is a Goldilocks report that’s “not too hot and not too cold” – meaning it’s not too strong to backfire Induce the Federal Reserve to become more aggressive in tightening its monetary policy, nor is it too weak to raise even more concerns about a US economic recession.

Global equity markets were mostly higher overnight. US stock indices are heading for higher opens as the New York daily session gets underway on corrective rallies from the last three sessions’ selling pressures and the US jobs report reading ending in the ‘sweet spot’ of market expectations.

On the overnight news, euro-zone producer price index rose 41.9% yoy in September, close to expectations. Rising energy costs in Europe are driving the PPI sharply higher.

The silver market bulls have been outperforming the gold bulls of late. One reason could be the increasing demand for India. Broker SP Angel said in an email today: “Silver India’s insatiable appetite for silver is eating away at global inventories. Analysts expect Indian silver consumption to have increased by over 80% this year. Indian silver buying has been hit hard in the two Covid years except 2022 Buying has seen a big surge in demand. Traders are reporting stock levels in London and Hong Kong as pent-up demand feeds into the market.”

Today, major outside markets are seeing the US Dollar Index fall on a corrective pullback from Thursday’s strong gains. Nymex crude prices are significantly higher, trading around $91.50 a barrel. The 10-year US Treasury bond is yielding around 4.2%.

Other US economic data due for release on Friday includes the Global Services Purchasing Managers’ Index.

Live 24 hour gold chart [Kitco Inc.]

Technically, the gold futures bears have the solid short-term overall technical advantage. The bulls’ next upside target is to find a close above the solid resistance at $1,700.00. Bears’ next short-term downside target is to push futures prices below the solid technical support at $1,600.00. Initial resistance is seen at this week’s high of $1,673.10 and then $1,679.40. Initial support is seen at $1,650.00 and then overnight low of $1,631.10. Wyckoff’s market rating: 2.0

Live 24 hour silver chart [ Kitco Inc. ]

The silver bulls have regained the short-term overall technical advantage. A choppy uptrend is present on the daily bar chart. The silver bulls next upside target is a close above solid technical resistance at the October high of $21.31. The next downside target for the bears is a close below the solid support at $18.00. Initial resistance is seen at $20.50 and then $21.00. Next support is seen at $20.00 and then overnight low of $19.425. Wyckoff’s market rating: 6.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of the author Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article assume no responsibility for any loss and/or damage resulting from the use of this publication.


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