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David Becker
Comex Gold
Comex Gold

Gold prices moved lower on Friday as yields increased and the dollar moved up following a larger than expected increase in non-farm payrolls. While the headline number beat expectations downward revisions to prior months took away 50K jobs. Wage growth as the focus for many traders.  The 0.4% month over month increase pushed earnings to the highs levels since April 2009.

Technical Analysis

Gold prices moved lower but continued to hover underneath resistance near the 10-day moving average at 1,200.  Prices are consolidating and trading sideways. Prices on a weekly chart are forming a bear flag pattern which is a pause that refreshes lower.  Target support on a daily chart is seen near the August lows at 1,160.  Target support on a weekly chart is seen near the December 2016 lows at 1,123. Daily momentum is neutral as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which reflects consolidation. The fast stochastic continues to move lower in a downtrend which reflects accelerating negative momentum.

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Jobs Data was Mixed

The US jobs data released on Friday was mixed. The headline number and hourly earning pushed yields higher, but revisions to the July and June figures the uptick in the unemployment rate and the decline in the participation rate, point to some minor weakness. The unemployment rate held near low of 3.9% percent, according to a Bureau of Labor Statistics report Friday. Expectations were for a decline to 3.8%. Expectations were for a 190K rise in the headline figure. Additionally, and most importantly, the 2.9% year over year uptick in hourly earnings was stronger than the 2.7% increase expected. On a month over month basis hourly earnings jump a robust 0.4%. The wage growth was the highest since April 2009. The participation rate fell to 62.7%, matching the lows since mid-2016.  This means that less people were looking for jobs than any time in the past 2-years.

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