Gold Weaker On Follow-Through Selling, Post U.S. Jobs Report

(Kitco News) - Gold prices ended the U.S. day session modestly lower and hit a two-week low Monday. Follow-through selling following Friday’s down day was featured. The precious metals markets have taken a hit in the aftermath of a stronger-than-expected U.S. employment report released last Friday that puts a Federal Reserve interest rate hike this year back on the table. December Comex gold was last down $2.50 an ounce at $1,341.90. September Comex silver was last down $0.007 at $19.81 an ounce.

World stock markets were mostly higher Monday as risk appetite in the world marketplace has been on the upswing the past couple weeks. U.S. stock indexes were weaker on mild profit taking in afternoon trading Monday. The weaker U.S. equities markets helped precious metals prices move up from their daily lows.

There was some weak economic data coming out of China Monday. Imports in U.S. dollar terms were down 12.5% in July, year-on-year, while China’s exports were down 4.4% in the same timeframe. Both figures were down a bit more than market expectations. Still, Asian stock markets were higher Monday, boosted in part following the strong U.S. jobs report on Friday that helped to weaken the Japanese yen against the U.S. dollar.

The key “outside markets” on Monday saw the U.S. dollar index firmer, on follow-through strength from Friday’s up day following a dollar-bullish U.S. jobs report. Meantime, Nymex crude oil futures prices were solidly higher in afternoon U.S. trading and hovering just above $43.00 a barrel. Oil prices have made a recent rebound to begin to suggest that a market bottom is in place.  

U.S. economic data due for release today was light and included the employment trends index.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Technically, December gold futures prices closed nearer the session high. The gold bulls still have the overall near-term technical advantage, but are now fading and need to show fresh power soon to keep their edge. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,384.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the July low of $1,318.50. First resistance is seen at $1,350.00 and then at $1,360.00. First support is seen at today’s low of $1,335.30 and then at $1,325.00. Wyckoff’s Market Rating: 6.0

September silver futures prices closed nearer the session high. The silver market bulls still have the overall near-term technical advantage, but have faded recently and need to show fresh power soon. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.225 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.00 and then at $20.25. Next support is seen at today’s low of $19.515 and then at $19.27. Wyckoff's Market Rating: 6.0.

September N.Y. copper closed up 105 points at 216.45 cents today. Prices closed near mid-range today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the July high of 227.75 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of 211.65 cents. First resistance is seen at today’s high of 218.10 cents and then at 220.40 cents. First support is seen at last week’s low of 215.05 cents and then at 213.00 cents. Wyckoff's Market Rating: 4.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff