How to interpret today’s jobs report, and what does it mean for gold prices?

Today’s September jobs report showed a slowdown in monthly gains, with 263k new jobs added last month, down from the previous month when 315k new jobs were added.

The profound impact on almost every asset class in the financial markets was not due to the tepid numbers, but to the Federal Reserve’s hope that those numbers would be even lower. The Federal Reserve had hoped that today’s report would show even slower growth as it would indicate progress by the Federal Reserve in reducing inflation.

Inflation is still at a 40-year high even after the Federal Reserve has hiked interest rates at every FOMC meeting since March. The Fed hiked rates by 25 basis points in March, 50 basis points in May, and 75 basis points in June, July and September. The Fed raised interest rates from 0-25 basis points in February to 300-325 basis points in September.

Although today’s report suggests a slowdown in job growth, the Federal Reserve’s fall is not believed to be enough to slow its current pace of rate hikes.

According to CME’s FedWatch tool, there was a 56.5% chance last week, a 75.2% chance yesterday, which has risen to an 82.3% chance today, that the Federal Reserve would cut interest rates for the fourth time Follow will raise 75 basis points in November FOMC meeting. This probability indicator forecasts the probability of FOMC interest rate movements using 30-day Fed Funds futures price data.

Today’s report had a profound impact on US stocks. As of 2:35 p.m. EDT, the Dow is currently trading down 661 points, down 2.22%. The NASDAQ is currently down 3.75%, down about 415 points, and the S&P is down 106.16 points, or 2.90%.

Today’s report also had a profound impact on gold prices, which opened at $1721 and then traded to a high of $1722.80 before the report released gold futures as the most active December contract to today’s low of Brought $1698.40. Gold futures rallied to around $1714 a few hours after the report was published. However, as of this writing at 3:20 p.m. EDT has been trading between $1702 and $1706 for the past hour.

So what does this mean for the future of gold prices? While this report is extremely important in an extremely important dataset that the Federal Reserve will use at its FOMC meeting on November 2nd, I believe next week’s CPI inflation report for September will be much more meaningful. But in terms of the Federal Reserve’s long-term impact on gold prices, it’s highly likely that if the Fed continues to hike rates and inflation persists, at some point market participants will need to focus on high inflation rather than laser-focus on rising rates . If this assumption is correct, gold could take it up dramatically. But it’s also likely that more pain is yet to come.

Our technical studies show that the first level of resistance occurs at $1710, the 23.6% Fibonacci retracement, which is based on a very short-term Fibonacci retracement dataset from September 28th to October 7th. Major resistance comes in at $1738, the recent high that started the rally after gold hit its lowest level in years at $1621. The first level of support occurs at $1,693.80, the 38.2% Fibonacci retracement, and then at $1,689.40, a 42% retracement.

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As always, I wish you good business and good health,