WHAT YOU NEED TO KNOW
  • Spot gold gained 0.96% to about $4,216.80, while silver rose 1.45% to $61.750.
  • Nonfarm payrolls increased by 29,000, missing estimates between 88,000 and 90,000 as unemployment reached 4.2%.
  • October rate increase odds fell into the mid teens, while the 10 year Treasury yield retreated toward 5.2%.
  • Strait of Hormuz risks kept freight, insurance and diesel costs elevated despite recovering Gulf crude export volumes.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Gold and silver climbed in early U.S. trading Friday after a weaker than expected employment report pushed Treasury yields lower and reduced expectations for an October Federal Reserve rate increase. Safe haven demand also supported precious metals as risks surrounding the Strait of Hormuz kept energy inflation in focus.

At the time of writing, spot gold traded near $4,216.80 an ounce, gaining 0.96% for the session. Spot silver stood at $61.750, advancing 1.45%.

The September employment report served as the main event for interest rate pricing. Nonfarm payrolls increased by only 29,000, falling far short of estimates clustered between 88,000 and 90,000.

The unemployment rate rose to 4.2%, while average hourly earnings increased 0.1% from the previous month and 3.0% from a year earlier. Payroll totals for July and August were revised lower by a combined 60,000 jobs.

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Traders adjusted their positions quickly following the report. The odds of an October rate increase dropped into the mid teens, compared with roughly one in four before the data and nearly 70% earlier in the week.

The benchmark 10 year Treasury yield retreated toward the 5.2% area, while U.S. stock futures advanced and the U.S. dollar index softened. Those moves helped gold and silver recover some of the losses driven this week by interest rates and the dollar.

Additional economic releases remained on the calendar. Factory orders and manufacturing shipments were scheduled for 10 a.m. ET, while the New York Fed Staff Nowcast was due at 12:45 p.m. ET.

Monday’s ISM services report was scheduled for 10 a.m. ET. The next round of inflation data begins with the consumer price index on Oct. 14 at 8:30 a.m. ET.

With the Federal Reserve expected to keep interest rates unchanged this month, do you think interest rates should remain where they are instead of being cut?

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Developments around the Strait of Hormuz remained an inflation and risk premium concern, even as the situation moved beyond a simple interruption of crude flows. Gulf crude exports had largely recovered toward prewar volumes as producers used pipelines, shuttle fleets and transfers between ships.

Refined product flows remained disrupted, however, while recent tanker strikes kept insurance, freight and diesel expenses elevated. The larger U.S. military presence in the region reduced the market’s estimated probability of an immediate full closure, but the risk of escalation between the United States and Iran remained active.

The combination left gold supported by safe haven buying after the disappointing payroll report. It also kept Brent crude near $100 a barrel and confronted the Fed with weaker labor conditions alongside inflation pressure connected to oil.

In outside markets, Nymex WTI crude oil prices weakened to around $89.41 a barrel, while Brent crude traded near $101.12. The benchmark 10 year Treasury yield remained close to 5.2%.

Close

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For spot gold, bulls were looking for prices to move back above the resistance zone between $4,203.65 and $4,225.28. A sustained advance could target $4,248.24 and then $4,279.11.

Gold bears were focused on a break below $4,149.83, followed by potential downside targets at $4,117.63 and $4,063.81. Initial resistance was identified at $4,203.65 and $4,225.28, while initial support stood at $4,149.83 and $4,117.63.

Silver bulls were seeking a move above the area from $61.737 to $62.327. Clearing that zone could put $63.807 and then $65.090 in view.

For silver bears, the next downside objective was a break below $60.258. Deeper targets were located at $59.368 and $57.889, with initial resistance at $61.737 and $62.327 and support at $60.258 and $59.368.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.