Advertisement
Advertisement
Gold Price Forecast – Weak Jobs Report Sparks Rebound in Precious Metals
By:
Key Points:
- The odds of a September rate cut are rising sharply following Friday’s surprisingly weak payroll report.
- The Bureau of Labor Statistics reported just 73,000 jobs added in July, with the unemployment rate ticking up to 4.2%. However, the biggest shock came from major downward revisions to previous months.
- June’s job gains were revised down from 147,000 to just 14,000, a drop of 133,000—while May’s figure was slashed from 144,000 to 19,000, a downward revision of 125,000. In total, 258,000 jobs were erased from the prior two months' reports.
- Precious metals are approaching interim cycle lows, and a short-term bounce could occur in the first half of August. However, I expect the rebound to be brief, with prices likely rolling over later in the month forming lower lows before reaching a more sustainable bottom in September.
Our Gold Cycle Indicator Finished at 231
US Dollar
The dollar dropped sharply after Friday’s jobs report, but the recent breakout above the 50-day EMA suggests an intermediate rebound toward the 200-day moving average, potentially extending into September.
Gold
Gold is approaching an interim cycle low, and a rebound is possible in the first half of August. If the recovery fails to decisively break above the trendline currently near $3,450, a lower low is likely later this month, with the next significant bottom expected in the first half of September.
Silver
Silver appears to be nearing an interim cycle low, and prices may have bottomed on Thursday. For the rebound to gain traction, it must decisively break above $40.00. Failure to clear that level would promote a lower low followed by a more sustainable bottom in September.
Platinum
Platinum is likely forming an interim cycle low this week, and prices need to break above $1,500 to extend the rally. Failure to do so could pave the way for a lower low heading into September.
Copper
Copper prices fell sharply after the White House announced a 50% tariff on semi-finished products like pipes, rods, and wires, but left out raw materials, surprising the market.
GDX
Miners are expected to break the July lows in August and perhaps test the 200-day MA before bottoming in September.
GDXJ
Juniors were the first to break down, and I expect continued weakness into September.
SILJ
Silver juniors will confirm an intermediate degree breakdown once they close below the June $14.11 low. However, I don’t expect a lasting bottom until the first half of September.
S&P 500
Stocks posted an outside reversal day as markets began to scale back expectations for a September rate cut. This could lead to a correction or consolidation lasting several weeks.
In summary, Friday’s weak jobs report has significantly shifted market expectations, increasing the likelihood of a September rate cut and sparking a rebound across precious metals. While short-term bounces are likely in gold, silver, and platinum, the technical outlook suggests these rallies may be temporary, with lower lows and more durable bottoms still expected in the first half of September.
AG Thorson is a registered CMT and an expert in technical analysis. For more price predictions and daily market commentary, consider subscribing at www.GoldPredict.com.
About the Author
AG Thorsoncontributor
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle that will begin to unravel in 2020.
Advertisement