1. In the week ahead, the September jobs report is expected to provide further clues on how quickly the labor market is cooling. Updates on job openings, activity in the services and manufacturing sectors, and consumer confidence are also on the calendar. The most recent reading of the Fed’s preferred inflation gauge showed price increases continue to cool toward the Fed’s 2% goal, putting further focus on the Fed’s other mandate: maximum employment. Still, there’s been a clear slowdown in the labor market. The unemployment rate has steadily crept up in 2024 and sits at 4.2%, near its highest level in almost three years. Meanwhile, job gains have slowed, with the economy recording two of its lowest monthly job additions of 2024. And job openings in July were at their lowest level since January 2021. The pressing question as the release of the September jobs report on Friday morning approaches is just how quickly this slowdown in the labor market is taking place.
2. After hitting record highs for the last six days, the gold market is taking a breather as it experiences some technical selling pressure. Solid buying momentum briefly pushed gold above $2,700 an ounce last Thursday. However, some analysts express growing concerns that the precious metal’s rally may be a bit overdone. December gold futures last traded at $2,669 an ounce, down nearly 1% on the day; however, prices are up nearly 1% from last Friday. After hitting a series of fresh record highs following a surprisingly large U.S. rate cut, prices are showing signs of stabilizing. Some degree of buying fatigue is beginning to emerge, raising the question of whether we are close to a long-overdue consolidation or perhaps even a correction. After cutting rates by 50 basis points and signaling that rates could fall to 3% by 2026, the Fed is clearly in easing mode, which bodes well for gold.
3. The Biden administration exerted additional pressure on ports negotiators Tuesday and announced an effort to monitor for supply chain weak spots on day one of the dockworkers strike that could ripple through the U.S. economy. But looming large are questions around what additional steps could be needed in the weeks ahead, from directly mediating the talks to perhaps even forcing union members back to work. The International Longshoremen’s Association union, which represents roughly 45,000 workers, began to set up picket lines just after midnight for the first time since 1977. The U.S. Maritime Alliance, which operates the ports and is negotiating with the union, added in a statement that “both sides have moved off their previous positions” but added that it has offered no concession on the key sticking point issue of automation at ports. That leaves the White House weighing its options amid dwindling chances of a quick organic resolution to the complex talks. After a few weeks if not sooner, multiple experts said, a strike could become a significant headwind to the economy not to mention the mindset of voters with election day just 35 days away.
4. U.S. stocks moved deeper into the red on Tuesday as investors assessed a new batch of economic data. Meanwhile, reports that Iran is preparing a potential missile strike against Israel pushed bond yields lower and boosted the price of crude oil. The Dow Jones Industrial Average slid roughly 0.5%, while the S&P 500 fell about 1% after both major indexes capped last quarter with fresh record highs. The tech-heavy Nasdaq Composite escalated losses in early trading, dropping around 1.7%. Fresh jobs and manufacturing data kicked off the new quarter as investors searched for further clues on the future of the Federal Reserve’s easing cycle. Job openings surprisingly increased in August, furthering the narrative that while the labor market is cooling, it’s not rapidly slowing. New data showed there were 8.04 million jobs open at the end of August, an increase from the 7.71 million seen in July. Meanwhile, manufacturing held steady in September. The Institute for Supply Management said its manufacturing PMI was unchanged at 47.2 last month. Despite holding steady, the reading still came in weak, as a PMI below 50 indicates a contraction in the manufacturing sector.
5. Climate-friendly hydrogen was one of the most-hyped sectors in green energy. Now the reality of its high cost is taking its toll. In recent months, some of the biggest would-be developers of the fuel have canceled projects, axed orders and scaled back investment plans. The low-carbon fuel is simply too expensive to stimulate demand in many sectors of the economy. “It has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome,” Origin’s Chief Executive Officer Frank Calabria said in a statement. “The combination of these factors mean we are unable to see a current pathway to take a final investment decision on the project.” Origin Energy is just the latest example of a company stepping back its plans. Earlier this week, Norway’s Nel ASA, which makes the machines that produce green hydrogen, said that Mississippi-based Hy Stor Energy canceled an order for 1 gigawatt of equipment. That would have been enough to build by far the biggest such project in the U.S.
6. The number of Americans filing new applications for unemployment benefits rose last week, and the devastation unleashed by Hurricane Helene in the Southeast and strikes at Boeing and ports could distort the labor market in the near-term. The report from the Labor Department on Thursday showed the labor market gliding at the end of the third quarter, a situation that could allow the Federal Reserve to be in no rush to deliver large interest rate cuts. Initial claims for state unemployment benefits increased by 6,000 last week to a seasonally adjusted 225,000 for the week ended Sept. 28. Economists polled had forecast 220,000 claims for the latest week.
7. Oil prices have jumped more than $5 a barrel since the start of the week amid intensifying fears that Israel could launch an attack on Iran’s energy infrastructure. The rally, which puts crude futures on track for gains of around 8% week-to-date, has surprised many market observers in that it appears to be somewhat subdued given what’s at stake. At 12:48 p.m. ET, the WTI benchmark was trading up $1.19 (+1.61%) on the day at $74.90, a roughly $6.50 per barrel gain from this time last week. The Brent benchmark was trading up $1.06 (+1.37%) on the day at $78.63—a nearly $7 per barrel increase over last Friday’s price.
8. EUR/USD dips below the psychological support of 1.1000 in Friday’s New York session. The major currency weakens as upbeat United States Nonfarm Payrolls (NFP) report for September has strengthened the U.S. Dollar. The Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, surges above 102.50.
9. USD/JPY breaks clearly above the 147.24 October 3 high on an intraday basis which suggests a continuation of the short-term uptrend with a tentative target at 149.40, the August 15 high. The strong bullish momentum since the August bottom, as measured by the Moving Average Convergence Divergence (MACD) indicator could indicate the start of a new, longer up trending move.
Risk markets are off to an ominous start this October. Geopolitical tensions and an Iranian missile strike on Israel are dominating headlines, pushing crude oil prices higher as fears of supply disruptions escalate. The first strike by the International Longshoremen’s Association since 1977 threatening supply chains once again and potentially shuttering ports from Houston to Boston isn’t helping. But there’s another key driver adding structural bullishness to commodities: China’s largest stimulus package since the pandemic, with the promise of more to come. Last week, China unleashed a suite of monetary and fiscal easing measures, catapulting China’s benchmark CSI 300 Index 27% from its September lows into fresh bull market territory. New support for China’s beleaguered housing market this week adds to prior measures, including support for Chinese-listed stocks — which all told now total over $500 billion (though estimates vary widely). These aggressive actions are already reverberating through global commodity markets. Iron ore futures have surged over 20% in China. Connecting the dots, it’s a potential short trip to higher energy prices.
The U.S. labor market added far more jobs than projected in September while the unemployment rate unexpectedly ticked lower, reflecting a stronger picture of the jobs market than Wall Street had expected. Data from the Bureau of Labor Statistics released Friday showed the labor market added 254,000 payrolls in September, more additions than the 150,000 expected by economists. The key question entering Friday’s report was whether the data would reflect significant cooling in the labor market, which could prompt another large Fed interest rate cut. Robert Sockin, Citi senior global economist, said that the better-than-expected jobs report makes it less likely the Fed will move with the “urgency” it did at its September meeting when the central bank cut interest rates by half a percentage point.
Whether it’s robots stacking shipping containers or ChatGPT editing a movie script, workers this year are fretting over technology. Dockworkers who walked off the job this week, over demands for higher pay and a ban on automation marked the latest example of that collective anxiety boiling over. In the absence of workplace policy that balances the rush of technology with job security, expect more labor action to fill the void. Unionized workers are increasingly deciding for themselves how they want tech advancements to play out, rather than fully accepting the whims of their employers. That’s true for dock workers just as it was for Hollywood writers. Just a few days ago, California Governor Gavin Newsom vetoed a high-profile bill that would have been one of the most comprehensive policies around regulating AI. The potential impact of the port strike on the economy is a key point of leverage for workers. The timeline remains fuzzy, but experts say a prolonged work stoppage would cause significant delays in unloading cargo, higher prices, and product shortages.
Volatility should be expected to remain high as investors will be closely watching for hints on upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hopes that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.
Trading Department – Precious Metals International Ltd.
Friday to Friday Close (New York Closing Prices)
| Sept. 27, 2024 | Oct. 4, 2024 | Net Change | ||
| Gold | $2,644.99 | $2,650.06 | 5.07 | 0.19% |
| Silver | $31.47 | $32.21 | 0.74 | 2.35% |
| Platinum | $1,005.90 | $993.90 | -12.00 | -1.19% |
| Palladium | $1,015.49 | $1,002.80 | -12.69 | -1.25% |
| Dow | 42333.07 | 42356.16 | 23.09 | 0.05% |
Month End to Month End Close
| Aug. 30, 2024 | Sept. 30, 2024 | Net Change | ||
| Gold | $2,499.78 | $2,637.94 | 138.16 | 5.53% |
| Silver | $28.82 | $31.15 | 2.33 | 8.08% |
| Platinum | $928.60 | $981.02 | 52.42 | 5.65% |
| Palladium | $968.60 | $1,002.28 | 33.68 | 3.48% |
| Dow | 41562.95 | 42330.15 | 767.20 | 1.85% |
Previous Year Comparisons
| Oct. 6, 2023 | Oct. 4, 2024 | Net Change | ||
| Gold | $1,831.89 | $2,650.06 | 818.17 | 44.66% |
| Silver | $21.56 | $32.21 | 10.65 | 49.40% |
| Platinum | $881.71 | $993.90 | 112.19 | 12.72% |
| Palladium | $1,165.46 | $1,002.80 | -162.66 | -13.96% |
| Dow | 33401.42 | 42356.16 | 8954.74 | 26.81% |
Here are your Short-Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
| Support | 2619/2580/2548 | 30.40/29.18/28.01 |
| Resistance | 2691/2742/2763 | 32.78/33.95/35.17 |
| Platinum | Palladium | |
| Support | 991/982/967 | 990/981/953 |
| Resistance | 1014/1029/1038 | 1039/1067/1082 |