Gold is looking to end the week where it started, breaking down through support this morning to erase this week's gains. Spot gold is down $20 an ounce in early trading, with gold futures down $14. Prices are near this morning's lows.
Wall St opened sharply lower on the heels of the non-farm payroll report, joining global stocks in negative territory. The NFP report is increasing fears in the marketplace that we may see three rate hikes instead of two this year.
The dollar didn't see support from the payrolls report, but both equities and the buck caught a big updraft from a better than expected ISM Manufacturing Index report.
Gold has broken through initial support at $1,214. Next support is $1,208, then $1,200. Resistance is at $1,230, then $1,234.
Non-Farm Payrolls for March came in at 215,000 new jobs added for the month. marginally better than the 210,000 expected. While lower that the 245,000 revised figure for February, it is still considered a solid report. Earnings were reported 7 cents higher, for a 0.3% increase. Unemployment was up to 5% from 4.9%, but for the best of reasons. More people entered the workforce. The labor participation rate ticked up a tiny bit, to 63%
The U6 unemployment rate, which includes people working part-time that want to work full-time, and "discouraged" unemployed workers who aren't actively seeking a job, rose to 9.8% from 9.7%
Some analysts see this report as increasing the odds of three rate hikes this year, instead of just two.
Oil Dreams Doused
Proving that the global oil glut can counteract good economic news, Stocks opened sharply lower on news that Saudi Arabia refuses to keep production at current levels unless Iran signs the "production freeze" accord. There is exactly zero chance of that happening, since Iran is still attempting to bring production back to normal levels after international sanctions were lifted.
As a result of this news, Nymex oil futures tumbled over 3% to wipe out all of 2016's gains.
Other Economic News
Stocks and the dollar got a big boost from the ISM Manufacturing Index, which showed expansion for the first time in six months. The reading came in at 51.8, from a 49.5 reading the month before. Analysts were expecting a 50.5 print. Wholesale prices in the manufacturing sector inched up to 51.5 from 51.3, slightly lower than expected.
Consumer sentiment rose from 90.0 to 91.0, in line with expectations, while construction spending fell for the fourth month in a row, dropping into contraction with a -0.5% reading.
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