Gold positive After US Employment and Nonfarm Payrolls Data

Gold positive After US Employment and Nonfarm Payrolls Data

Gold reacted positively after a stronger than expected US employment report and an upbeat nonfarm payrolls number in April. The jobless rate fell to its lowest in almost 50 years. However, US workers didn’t make as much money as expected.

Yields, indices, oil and metals such as silver and copper are trading higher. Dollar, on the other side, is steady.

Upbeat but with clouds US employment report

The United States created 263K new jobs in April, a number well above the 185K jobs expected by the market. However, Earnings were strong too, but it increased only by 3.2% YoY, below the 3.3% expected by experts.

Average workweek hours declined to 34.4 from 34.5, meaning that real average hourly earnings were worse than the 3.2% published as US people worked less and got paid less in April.

The unemployment rate fell to 3.6%, the lowest level since December 1969. Participation rate in the United States declined to 62.8% in April from 63% in February.

So, long story short, substantial good headline in the Employment report but clouds and concerning questions in the fine print.

Dollar recovers ground after NFP

XAUUSD daily chart Gold May 3
XAUUSD daily chart Gold May 3

Gold is currently trading higher following a US employment report with a strong headline but mixed fine prints.

With yields going up, gold is recovering from the 1,266 low to trade at current 1,280, a 0.50% plus advance on the day.

Technical indicators suggest more room for the upside with the gold heading towards the 20-day moving average level at 1,283. Above there, XAU/USD will find resistances at 1,290, 1,300 and finally the 1,310.

If the pair fails to consolidate gains, it will return to test the 1,266 lows. Below there, Watch out for the 200-day moving average at 1,250.

Watch out for rebalancing and profit taking movements ahead of the weekend after a big nonfarm payrolls release.

Silver recovers from fresh 2019 lows

XAGUSD daily chart silver may 3
XAGUSD daily chart silver may 3

Silver is trading higher on Friday following the US employment report, its positive correlation with XAU/USD and a profit-taking movement ahead of the weekend.

XAG/USD is trading in recovery mode after bouncing off at 14.60, new lowest level since December 20. The unit has recovered all losses suffered on Thursday, and it is now trading at 14.80, posting a 1.12% daily gain.

The 14.80 area is now acting as a critical resistance that the metal should break up if it wants to consolidate gains. Above there, the return to the previous range between 14.90 and 15.10 would be the most natural outcome.

On the other hand, if the pair fails to extend gains, it will find support at the mentioned 14.60 and then, 14.50 and 14.40. However, remember that the 14.60-14.80 is a dense zone.

Copper consolidates levels after NFP

Copper is currently trading positive on the day, but it is moving more in consolidation pattern than a real recovery mood.

XCU/USD is posting 0.67% daily gains at 2.7922. Previously, the mineral fell from 2.8990 on May 1 to find support at 2.7610 on May 2. Then it started bouncing on the NFP day.

It is too early to say that copper is on recovery mood as technical indicators remain negative. It looks like a profit-taking move ahead of the weekend.