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James Hyerczyk
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Comex Gold

Gold futures jumped to their highest levels since February 11 on Friday as U.S. Treasury yields plunged after a U.S. labor market report for April came in well below expectations. The news drove down hopes that the economy was heating enough to encourage the Federal Reserve to tighten policy sooner than expected.

Non-Farm payrolls increased by only 266,000 jobs last month after rising by 770,000 in March, the Labor Department said in its closely watched employment report on Friday. Traders were looking for an increase of 978,000 jobs. The unemployment rate rose to 6.1% in April from 6.0% in March.

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At 19:32 GMT, June Comex gold futures are trading $1832.90, up $17.20 or +0.95%.

The U.S. Dollar also fell sharply against a basket of major currencies, driving up foreign demand for dollar-denominated gold.

Daily June Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $1844.60 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest swing bottom at $1754.60.

The market is also trading on the bullish side of a long-term retracement zone at $1788.50 to $1711.90. This zone is not only new support, but it’s also controlling the longer-term direction of the market.

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Short-Term Outlook

Although we may see a few short-term swings over the near-term, the longer-term uptrend is likely to remain intact as long as prices can hold above the major 50% level at $1788.50.

If the upside momentum continues then look for another near-term surge into the February 10 main top at $1858.90. This is potential resistance, but it’s also the trigger point for an acceleration to the upside.

For a look at all of today’s economic events, check out our economic calendar.
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