Gold hit its highest level since November on Friday after a weaker-than-forecast U.S. jobs report. December futures which had already made a technical breakout to the upside earlier in the week, peaked at $1,334.50 an ounce. The Labor Department reported that non-farm payrolls rose a lower-than-expected 156,000 last month. Additionally, there were downward revisions to the previously reported jobs gains for June and July. Further, the unemployment rate ticked up slightly 4.4% from 4.3%. Along with the jobs data, the recent escalation this week regarding the North Korean missile launch kept the shorts at bay as we enter into a three day weekend. Gold and Silver’s push higher is even more impressive given the stock markets reaction as the Dow finished the week above 22,000 while the S&P is currently trading ten points (handles) away from all-time highs. While it isn’t uncommon for the precious metals to rally in tandem with equities, that relationship is usually short lived. This means one sector will likely lose to the other in my opinion. The geopolitical situation has given both gold and silver fundamental backbone of support where dips in the market have become buying opportunities. Seasonally the late summer/early fall time frame has been a traditional boon for prices as global demand peaks from major world buyers India and China. If in fact the North Korean situation eases along with threats of a government shutdown and default on the debt ceiling the trade should look for some back and fill on the charts. Today’s disappointing jobs report combined with prior month revisions for the worse has most likely priced in no more quarter point interest rate hikes for this calendar year. So that will be priced into the market going forward which could put in a near term floor in the Dollar. For the week December gold gained $32.60 to close at 1330.4. December silver closed at 1781.5 gaining 67 cents on the week.
Watch your trading hours this weekend especially if tensions with North Korea erupt again or something else enters the market. For gold and silver, the market has its regularly scheduled Sunday night open and remains open electronically until Monday at noon Chicago time. The market then reopens at 5 pm Monday evening for Tuesdays trade. My weekly technical’s come in as follows for next week. For December Gold, support is down at 1306.7 and with a close under 1283.1 is next. Resistance is first at 1344.2 and with a close above next resistance is up at 1358.1.
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