Breaking: Non-Farm Report Surpasses Expectations, Gold Plunges Instantly
Gold and silver prices fell in the early U.S. session on Friday, after a key U.S. economic report came in stronger than expected, favoring the hawkish camp on monetary policy. December gold fell by $18.30 to $2,660.90, while December silver dropped by $0.419 to $32.045.
The just-released U.S. data for the week (if not the month) showed that the Labor Department's September jobs report indicated a primary non-farm payroll increase of 254,000, while the market expected an increase of about 150,000. The overall unemployment rate for September was 4.1%, slightly lower than anticipated. CNBC's Ric Santelli stated, "This is a strong report." Today's employment data may put to rest any thoughts of the Federal Reserve lowering key interest rates by another 0.5% at a Federal Open Market Committee meeting.
Asian and European stock markets saw mixed gains and losses overnight. Chinese stock markets were closed this week due to holidays. At the opening of New York trading, U.S. stock indices opened higher. U.S. stock market bulls were somewhat relieved that the dockworkers' strike had ended, at least for now.
There is still a general sense of risk aversion in the market. Heading into an uncertain weekend, Israel continues its offensive in Lebanon and vows to retaliate for missile strikes on Iran this week. After President Biden's speech on Thursday, there is increased concern that Israel may target Iran's crude oil infrastructure, which could lead to a surge in oil prices.
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Today, the main external market saw the U.S. Dollar Index steadily rise and rebound after the release of the jobs report. Crude oil prices on the New York Mercantile Exchange were higher, trading at around $74.00 per barrel. The eruption of the situation in the Middle East drove up oil prices. The benchmark 10-year U.S. Treasury bond yield is declining, currently at 3.936%, having risen after the release of the jobs report.
Technical Analysis for Gold and Silver
Technically speaking, December gold bulls have a strong overall technical advantage in the short term. The next upside price objective for the bulls is to close above the solid resistance level at $2,800.00. The next near-term downside price objective for the bears is to push futures prices below the solid technical support level at $2,600.00. First resistance is at $2,675.00, then at the overnight high of $2,687.70. First support is at $2,650.00, then the week's low at $2,646.20.
December silver futures bulls have a solid near-term overall technical advantage. On the daily bar chart, prices are in a seven-week uptrend. The next upside price objective for bullish silver is to close above the solid technical resistance level at the May high of $33.50. The next downside price objective for the bears is to close below the solid support level at $30.00. First resistance appears at this week's high of $32.59, then at $33.00. The next support is Thursday's low at $31.65, then the week's low at $31.155.
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