Gold prices show little reaction to staggering U.S. job losses

May 8, 2020

New York (May 8)  Gold prices are trading modestly lower in early U.S. dealings Friday, in the immediate aftermath of a record-setting plummet in U.S. non-farm payroll jobs by 20.5 million in just the month of April. The U.S. unemployment rate shot up to 14.7% from only 4.4% in March. The marketplace, including gold and silver, showed little reaction to the dour news because it was fully expected. Weekly U.S. jobless claims reports the past few weeks actually show the U.S. workforce has lost over 30 million jobs in less than two months. June gold futures were last down $4.00 an ounce at $1,721.90. July Comex silver prices were last up $0.20 at $15.795 an ounce.

Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The general public (not the investing public) is starting to pick up on the solid rebound in the U.S. stock market despite the gloom and doom that continues to envelope the American and global economies. The vast majority of regular traders and investors knows the rallying stock market means the marketplace strongly expects the North American and European economies will be roaring back to life in the coming months. However, for the general public, most of which does not have a portfolio of stocks, the rallying stock markets could give Wall Street another black eye amid the perceptions of the rich getting richer during these extremely troublesome times that have so many out of work. Don’t be surprised if the U.S. presidential election this fall has at least some attention paid to this matter.

On the positive side of the ledger on this last trading day of the week, U.S. and Chinese trade officials had a conference call overnight, reports said. The call was apparently prompted by President Trump threatening to call off the Phase 1 trade deal reached in January. The reports said the call went well. China has been purchasing more American agricultural products, as reported by USDA this week.

Traders and investors are also more upbeat this week amid a strong recovery in Nymex crude oil futures prices as U.S. and European economies begin to reopen. Nymex futures are higher early today and trading around $24.00 a barrel. Less than two weeks ago June crude futures traded well below $10.00 a barrel. Many raw commodity futures markets have taken note that their sector leader, crude, has made such a strong recovery recently—because it implies other commodity markets may also have hit their lows, or are close to bottoming out.

Other U.S. economic reports out Friday include monthly wholesale trade.

Technically, the gold bulls have the overall near-term technical advantage amid an uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,666.20. First resistance is seen at the overnight high of $1,735.50 and then at $1,750.00. First support is seen at $1,708.80 and then at $1,700.00.


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