Zaner Daily Precious Metals Commentary

12/6/2024

Gold and silver shrug off jobs report to remain range-bound

OUTSIDE MARKET DEVELOPMENTS: U.S. nonfarm payrolls rose 227k in November, above expectations of +215k, versus a revised +36k in October (was +12k). The unemployment rate ticked up to 4.2%.

Hourly earnings rose 0.4% on expectations of +0.3%, versus +0.4% in October. The average workweek was 34.3 hours, versus a revised 34.2 hours in October.

While the labor market has recovered from hurricane-related distortions and the Boeing strike in October, the trend since Q1 reinforces the perception that the jobs market is cooling.

That concern is reflected in the jump in December rate cut expectations to near 90%. That's up from 71% yesterday and 66% a week ago.

Treasuries rallied and the dollar index slipped to a three-week low. Stocks firmed, although risk appetite remains broadly neutral.

Fed Governor Bowman (centrist-hawk) worries that cutting rates too quickly could revive inflation. “I would prefer that we proceed cautiously and gradually in lowering the policy rate, as inflation remains elevated,” she said.

U.S. Michigan Sentiment (prelim) rose 2.2 points to a seven-month high of 74.0 in December, above expectations of 73.3, versus 71.8 in November. Current conditions surged 21.6% to 77.7, while expectations moderated to 71.6. Year-ahead inflation expectations rose to a six-month high of 2.9% from 2.6% last month. Long-run inflation expectations ticked down from 3.1%, versus 3.2% in November.

U.S. Consumer Credit for October comes out later today. Median expectations are $10 bln.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$5.96 (+0.23%)
5-Day Change: -$14.35 (-0.54%)
YTD Range: $1,986.16 - $2,789.68
52-Week Range: $1,812.39 - $2,789.68
Weighted Alpha: +29.34

Gold eked out a new low for the week in Asian trade, but the tone remains consolidative with little response to today's U.S. jobs data. The yellow metal needs to close above $2,650.59 to avoid a second straight lower weekly close. That seems unlikely as of this writing.



Last week's low at $2,609.76 remains protected with the new intervening barrier marked by today's earlier low at $2,617.65. With price action still confined to the lower half of last week's range, the short to near-term bias remains consolidative.

A breach of $2,609.76 early next week would shift attention to the rising 20-week moving average at $2,595.23 and the 100-day moving average at $2,583.31.

On the upside, initial resistance is well-defined by this week's series of highs at $2,650.65/$2,655.48. This zone provides a formidable barrier ahead of last Friday's high at $2,665.16 and the 50-day moving average at $2,667.78.

Gold-backed ETFs saw net outflows of 28.6 tonnes in November led by selling in Europe. It was the first global net monthly outflow since April as gold corrected from October's record high on soaring risk appetite in the wake of the U.S. election outcome. 

North American investors continued to be net buyers in November, notching a fifth consecutive month of inflows, albeit a scant 0.8 tonnes. The World Gold Council suggested it was largely the result of Canadian buying.

Silver edged to a new high for the week in Asian trading before falling back into the range, leaving resistance at $31.465 (19-Nov high) protected. An outside day is evident, but the white metal still appears poised for a higher weekly close as range trading continues.

 

A breach of $31.465 was needed to allow for a challenge of the more important $31.691/709 level (Fibonacci/50-day MA). Penetration of the latter would favor renewed probes above $32. 

A retreat below the 20-day moving average at $30.737 would leave chart support at $30.509/485 vulnerable to a challenge. Below the latter, the lows at $29.736/$29.703 would be back in play.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
Tornado Precious Metals Solutions by Zaner
312-549-9986 Direct/Text
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