Estimates for This Week’s Employment Numbers Miss Big, Both Over and Under

Both gold and silver had strong declines today following the release of the U.S. Labor Department’s jobs report. Estimates for today’s report were 185,000 non-farm payroll jobs would have been added in the month of November. The actual number came in at 81,000 above expectations with 266,000 new jobs being added last month.

This in contrast to the ADP national employment report which came in extremely below estimates. In-fact estimates for this week’s ADP report were at 150,000 jobs being added last month, this estimate was off by 86,000. The actual numbers released were that only 66,000 jobs were added in November. This led many analysts and market participants under the assumption that today’s report would also be well under expectations, the exact opposite of what happened.

While it is expected that the Federal Reserve’s FOMC meeting will be a nonevent, the big question is whether or not President Trump will go through with the initiation of new tariffs on December 15^th. Although the White House’s National Economic Council director Larry Kudlow stated that the United States and China are close to a trade deal, contradictory he also stated that the president is not bound by arbitrary deadlines saying, “There are no arbitrary deadlines, but the fact remains December 15 is a very important date with respect to a no go or go on tariffs,”.

As of 4:00 PM EST gold futures basis the most active February contract is trading down by $18 per ounce and fixed at $1465.10, a net decline of 1.21%. Silver sold off much more aggressively with today’s decline of $0.44 taking the most active March contract to $16.615.

On a technical basis gold’s declines earlier, this week resulted in a death cross when the 50-day moving average crossed below the 100-day in trading on Wednesday. That being said there is very solid support at $1453 which is the 38.2 % Fibonacci retracement and at $1460, the low of the week.

Resistance first occurs between the 50-and 100-day moving averages which are currently fixed at $1485 (50-day) and $1491.60 (100-day). Above that is the first level of major resistance at $1497.70 the 23.6% Fibonacci retracement.  These retracements are using a data set which begins at $1269 and concludes at $1566, the highest price point gold has seen since the conclusion of a multiyear correction that concluded at $1040 at the end of 2015.

Wishing you as always, good trading,

Gary Wagner