Trading gold closed Friday, but market participants await the jobs report

Although trading in the futures markets for precious metals, energies, grains, and other commodities is closed for trading tomorrow in honor of “Good Friday”, in this case, the government never rests. Tomorrow the Labor Department will release the most current data for its non-farm payroll jobs report for March. This is an exceedingly important piece of economic data that investors, industry leaders, and most importantly the Federal Reserve will monitor closely to glean information on the economy and inflation.

This report will give market participants potential insight into the upcoming moves of the Federal Reserve regarding if they will raise rates, and if they do what will the rate hike amount to. It might also provide information as to whether or not a pause in rate hikes is imminent. Currently, economists are forecasting that 238,000 jobs were added in March. This is based on a median estimate from a poll by the Wall Street Journal. If the actual numbers come in at 238,000 it will be a solid decline from February’s jobs report that came in indicating that 311,000 jobs were added two months ago and the unexpected 504,000 jobs added in January. Still, an increase of 200,000 new jobs in March would indicate continuous strong growth considering that before the pandemic of 2020 new job growth averaged 173,000 per month.

Strong growth in US jobs is typically viewed as an extremely positive sign of economic growth and prosperity. However, the Federal Reserve regards a contracting labor market as an obstacle in their fight to reduce inflation. A tighter labor market leads to rising costs to pay employees which creates additional inflationary pressure. The Federal Reserve would be much more content if the actual numbers of tomorrow’s report came in under 200,000, but more importantly revealed fractional increases in income.

Because the jobs report will occur when the precious metals markets are closed gold has had a moderate decline of $11.90 or 0.58% today as traders take profits. As of 5:45 PM gold futures basis, the most active June contract is fixed at $2023.70.

On a technical basis, there is no resistance until $2069 the highest closing price for gold futures on record. With a short-term bias, you can use today’s low of $2015 as a potential support level.

Wishing you as always good trading,