Gold Pulls Back As Traders Focus On Non Farm Payrolls Report
Gold is losing ground as U.S. dollar rallies after strong Non Farm Payrolls report. The report indicated that U.S. economy added +165,000 jobs in October, compared to analyst forecast of +65,000.
The encouraging report showed that Fed will focus on its fight against inflation. The job market is in decent shape, while inflation remains far away from the central bank’s 2% target. Worries about hawkish Fed put pressure on gold markets today.
FedWatch Tool indicates that the probability of a rate hike at the next meeting in December is 78.8%. I’d note that traders are not ready to bet on two consecutive rate hikes and believe that Fed will leave the federal funds rate unchanged at the meeting in January.
Treasury yields moved higher as bond traders reacted to job market data. The yield of 2-year Treasuries moved above the 4.51% level, while the yield of 10-year Treasuries settled above 4.85%. Interestingly, the yield of 30-year Treasuries declined to 5.25% as traders bet that hawkish Fed will keep prices under control in the long term.
U.S. equity markets rebounded after yesterday’s sell-off as traders rushed to buy the dip. This rebound provided some support to gold and other precious metals.
The nearest support level for gold is located in the $4000 – $4020 range. In case gold manages to settle below the psychologically important $4000 level, it will head towards the next support at $3890 – $3910.
On the upside, a move above the $4100 level will open the way to the test of the resistance at $4180 – $4200. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.
Silver Moves Higher As Gold/Silver Ratio Drops To 78
Silver managed to gain some ground as gold/silver ratio declined below the 78.00 level. I’d note that gold/silver ratio has recently made several attempts to settle above the 80.00 level but these attempts yielded no results. A move above 80.00 may trigger a strong sell-off in silver markets.
The technical picture remains unchanged as silver continues its attempts to settle above the resistance level at $51.00 – $52.00. If silver settles above the $52.00 level, it will head towards the $55.00 level. In case silver climbs above $55.00, it will head towards the resistance at $56.00 – $57.00.
On the support side, a move below the psychologically important $50.00 level will push silver towards the support at $47.00 – $48.00.
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See all Gold forecastsPlatinum Tests New Highs As Rebound Continues
Platinum is moving higher as traders ignore strong dollar and rising Treasury yields. The pullback in the oil markets provided some support to platinum in today’s trading session. Lower oil prices are bullish for platinum, which is dependent on industrial demand. Palladium markets are down by -1.7% today as traders take some profits off the table after the strong rebound from yearly lows.
Currently, platinum is trying to settle above the resistance level at $1520 – $1540. In case this attempt is successful, platinum will head towards the next resistance level, which is located in the $1600 – $1620 range.
On the support side, a move below the $1500 level will open the way to the test of the nearest support at $1440 – $1460.
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