Gold and silver prices are treading water in early U.S. trading Thursday, just ahead of what is arguably the most important U.S. data point of the month: the unemployment report for June. August gold was last down $5.80 at $4,077.00. September silver prices were last down $0.226 at $60.29.
It’s jobs, jobs, jobs Thursday! Today’s Employment Situation Report from the Labor Department is expected to show the U.S. economy added 110,000 jobs in June, marking the smallest monthly increase in employment in four months, following three consecutive months of stronger-than-expected gains in nonfarm payrolls. In May, payrolls rose by 172,000, although some analysts suggest that hiring related to the World Cup may have temporarily boosted employment. The U.S. unemployment rate is projected to remain at 4.3% for a fourth consecutive month. Meanwhile, average hourly earnings are expected to increase by 0.3% month-over-month, matching May's pace, while annual wage growth is forecast to edge up to 3.5% from 3.4%. Although payroll growth is expected to moderate, the June employment report is still likely to point to a resilient labor market. m
Fed Chairman Warsh remarks not so hawkish. Federal Reserve Chairman Kevin Warsh on Wednesday said price risks have come down in recent weeks, while repeating his determination to bring inflation back to the U.S. central bank’s 2% target. “Expectations of inflation over the first four weeks of this period have come down, inflation risks have come down,” Warsh said Wednesday at the European Central Bank’s annual Forum on Central Banking in Sintra, Portugal and as reported by Bloomberg. He doubled down on a message from his first press conference as Fed chairman last month that the central bank will deliver price stability. Two-year Treasury yields fell to their lows of the session after Warsh’s remarks. Warsh didn’t cite the specific price indicators he was monitoring. The most recent reading for the Fed’s preferred inflation gauge showed a 4.1% jump from a year before, with core prices, excluding food and energy, up 3.4%. Energy and gasoline prices, however, have plunged in recent weeks as the US and Iran engaged in peace talks.
Currency traders on central bank intervention watch. The Japanese yen rebounded sharply against the U.S. dollar overnight amid rising speculation that the yen’s continued weakness against the greenback may prompt a fresh round of intervention by Japan. The yen gained as much as 0.9% against the dollar before trimming the advance to trade at 161.60 in Tokyo. Earlier in the week the yen touched its weakest level versus the dollar since 1986. The abrupt move came as traders awaited U.S. jobs figures later Thursday, which have the potential to move the dollar-yen currency pair. The U.S. Independence Day holiday on Friday creates thin trading conditions on Thursday that would likely amplify the impact of any intervention. “Liquidity is expected to decline during the afternoon session in New York, when U.S. markets will effectively be closed for the Independence Day holiday,” said Masayuki Nakajima, senior currency strategist at Mizuho Bank in London. “If major U.S. economic releases, such as the employment report, were to come in weaker than expected and trigger broad dollar selling, intervention could become tactically more effective,” he said and as reported by Bloomberg.
Crude oil prices continue to slide as oil tankers move through Strait of Hormuz. Crude oil futures extended their slide to pre-war levels as flows through the Strait of Hormuz increase and traders grapple with signs of oversupply. “Brent futures slipped below $71 a barrel to trade at their lowest since the week before the Iran war began at the end of February. West Texas Intermediate dipped below $68. The United Arab Emirates last month restored its oil exports to pre-war levels of more than 3.9 million barrels a day, while a U.S. official estimates that oil supply through Hormuz has now reached more than 10 million barrels a day,” said a Bloomberg report. “The result has been a gush of oil coming onto the market at a time when many of the wartime workarounds are still in place — including releases of emergency reserves.”
The key outside markets today see the U.S. dollar index lower. August Nymex WTI crude oil prices are weaker and trading around $68.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.49%.
Technically, August gold futures prices are still trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at last week’s high of $4,238.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,750.00. First resistance is seen at this week’s high of $4,131.00 and then at $4,200.00. First support is seen at $4,000.00 and then at this week’s low of $3,955.40. Wyckoff's Market Rating: 2.0
September silver futures bull
