Spot gold fell 1.1% to $4,422.91 after touching $4,364.99. Silver fell, and cryptocurrencies tumbled.
Employers in the U.S. created 162,000 new positions in August, well above expectations of 56,000. The unemployment rate remained at 4.1% while average hourly earnings increased 0.3%. The report caused the dollar to rise and Treasury yields to tick up, dampening demand for assets with no interest income.
Ian Cooper attributes the sell-off to the strong payrolls report. The resilient jobs uptick raised the chances of another Fed rate hike, he says. The higher the rate, the more expensive the holding gold will be, but inflation and geopolitical demand may change that.
Cooper’s daily gold chart shows that the price is now approaching $4,423 after dropping. Source: Ian Via X
The candle has bounced from the $4,381 support zone, and it is recovering. This rebound indicates that buyers are buying down to $4,400 or below, but the price loss from the report has yet to be reversed.
In less than 15 minutes, $790 billion vanished from the value of gold and silver, sending the crypto industry into a panic, according to Ash Crypto. His chart indicates that gold is dropping from about $4470 towards $4380. Price then bounces slightly off and onto the $4,389.77 level in the range shown.
The silver panel has traded off a little in a similar manner from around $67.10 to $65.07. It then bounces back up to $65.51. Source: Ash Via X
Silver’s percentage loss is higher, indicating that it is more volatile and is related to both industrial activity and investment demand.
Ash Crypto estimates the loss at $790 billion, but this figure is not an official one. The chart reflects the sharp drop in the price, but it is not a confirmation of that aggregate price drop. Realized losses, which are determined by completed sales, and falling market value differ as well.
Bull Theory’s estimate of the losses of gold, silver, and crypto in 25 minutes is $835 billion. His 10-minute charts suggest that the bottom for gold may be in the $4,376.37 region, while the bottom for silver is at $65.07.
The overall cryptocurrency market capitalization is briefly brought down to $2.64 trillion.
These two estimates refer to different assets and to different time windows and should not be added together. Bull Theory has cryptocurrencies, and Ash Crypto has gold and silver.
The sentiment in both posts is the same: a general reaction to better jobs and a rate outlook.
The crypto panel supports the cross-asset reading. Traders did not treat metal and digital currency differently, just as they did with metals.
Traders did not treat digital currency and metal differently. That trend implies a brief period of interest-rate shock overcame their individual safe-haven, inflation-hedge, and speculative stories.
The initial gold price support level is at $4,381.48. Immediate gold price support is taking place at $4,381.48. If the daily close goes below the level, you will risk $4,192.31. If this weakens further, the $3,942.71 low and $3,915.17 support are likely to be seen, but they are a much larger correction to be made.
The chart places resistance at $4,735.12 and $4,864.35. Before testing those barriers, Gold has to break out of the $4,450 to $4,500 range. Source: Bull Theory Via X
The relative strength index has dropped back down into neutral territory around 52.43, following a previous pullback.
The bull market will demand that gold be able to stay above $4,381 and move back above $4,500. The building, which is worth $4,735, could be reopened. Silver also has to clear up from $65.00. If this support is breached, the metals may continue to correct and move lower.
The next step will be determined by how the Treasury yield, the dollar, inflation data, and Federal Reserve pricing play out. While the payrolls led to rate-hike expectations to increase, the employment report does not make the policy call. Now traders must wait for confirmation from inflation readings and official Fed guidance.
