Gold sees choppy price action following downbeat U.S. jobs data

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(Wallace Refiners) – Gold futures prices are chopping on both sides of unchanged in early U.S. trading Friday and got a slight initial lift from a U.S. jobs report that was a bit weaker than expected. However, those modest gains were quickly erased. The metals markets are again getting support from a depreciating U.S. dollar index that has hit a 2.5-year low this week. February gold futures were last up $2.50 at $1,843.60 and March Comex silver was last up $0.153 at $24.29 an ounce.

The just-released U.S. economic data point of the week saw the November U.S. employment situation report from the Labor Department show a non-farm payrolls rise of 245,000, while the unemployment rate was 6.7%, which was in line with expectations. The non-farm payrolls number was forecast at up 440,000 workers.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins, and not far below the record highs the S&P 500 and Nasdaq indexes set this week. Trader and investor attitudes are upbeat to end the trading week as it appears U.S. congressional leaders are moving closer to agreeing on a financial stimulus package for Americans. The package would be just under $1 trillion.

Record-high Covid-19 daily infections and deaths reported in the U.S. on Thursday did not dent marketplace enthusiasm much, nor have predictions the pandemic’s worst human impact will come in January and February, including U.S. deaths possibly doubling in the period, from the present level. The marketplace is clearly looking beyond the next few months and focusing on the highly successful vaccines that are already starting to be distributed to some in the U.S. and other countries.

The U.S. dollar index is weaker early today and is trading near this week’s 2.5-year low. The other important outside market sees January Nymex crude oil futures prices higher and trading around $46.30 a barrel. Oil prices are supported late this week by the OPEC oil cartel and Russia only increasing their collective output by 500,000 barrels a day. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.93%.

Other U.S. economic data due for release Friday includes the international trade report, and manufacturing shipments, inventories and orders.

Technically, the February gold futures bears still have the overall near-term technical advantage. While prices are still in a three-week-old downtrend on the daily bar chart, more price gains Friday would likely negate the price downtrend. Also, gold prices have climbed back above the key 200-day moving average. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,767.20. First resistance is seen at $1,855.00 and then at $1,875.00. First support is seen at Thursday’s low of $1,826.70 and then at $1,810.00. Wyckoff’s Market Rating: 4.5

March silver futures bulls and bears are on a level overall near-term technical playing field, but bulls have some momentum on their side. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the November high of $26.27 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.93. First resistance is seen at $24.50 and then at $25.00. Next support is seen at $24.00 and then at $23.50. Wyckoff’s Market Rating: 5.0.