Employment Numbers Turn Precious Metals Bearish

The employment report released this morning was close to estimates, and the initial response by the precious metals markets was bearish.

Gold, which had shown some strength during the night, dropped about $9.00 initially upon release of the report this morning, then found some buyers. This still leaves us still clearly within the range of recent weeks, but not far above the 1079.20 level I mentioned earlier this week. I continue to see a close above 1104.90 (December contract) as a strong bullish sign, and a penetration of Friday’s low of 1079.2 as a sign that new lows are likely.

Silver has worked timidly higher through the week, and is holding up better than the gold. The charts still show a congested, range-bound pattern for the last few weeks. I continue to consider a penetration of Friday’s high of 14.970 (September) as a strong bullish sign, but another test of recent lows cannot be ruled out.

On Tuesday, Platinum meekly peeked into new lows for this move, but refused to carry through, and the action since then has been contained by Tuesday’s range. We are at the low end of that range as I write this, and I think another penetration is probable, barring a close above 956.80 (October).

After making new lows on Tuesday, Palladium has worked a little higher. Last night we managed to trade above 604.00 (September), but we need a close above that level before we even consider calling a change in trend. A move to more new lows seems probable.