Feb 06, 2012 | 12:21 PM

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Paul Ebeling's Weekly Gold and Crude Oil Report

Gold trims gains on US Jobs data Gold futures on the COMEX Division of the New York Merc trimmed gains, and ended a bit lower Friday, as the encouraging US Jobs Report lifted global equity and commodity markets, and players took some profits, Silver closed at its highest level since March 2008, and Platinum also closed higher too. The most active Gold contract for December delivery lost US$2.3, or 0.2 percent, to finish at US$1,251.1 oz. The US Labor Department announced earlier Friday that the country shed 54,000 nonfarm jobs in August, which is 50% of what economists estimated, while the unemployment rate climbed to 9.6% from 9.5% in July, in line with expectation. Gold dropped after the report was released, as the stronger-than-expected increase of private sector payrolls lifted hopes about the prospects for the US economic recovery. Also, US equity snapped a 3 week losing streak and ended sharply higher Friday, a lots of stronger-than- expected economic reports fueled market optimism. The strong rally in stock markets also helped encourage investors to transfer their money from Gold markets to risky assets. Gold received some help and clawed back after a report showed that the US service sector expanded for the 8th month running in August. Gold rallied 1% on the week, and Silver rose 4.8% on speculations that the improving global economic recovery would lift demand for Silver as an industrial metal. Dec. Silver rose 27.7c, or 1.4%, to US$19.949 oz. October Platinum climbed US$9.6, or 0.6%, to US$1,561.1 oz. The Overall Technical Outlook Comex Gold (GC) Gold's rally continued to 1256.6 last week but lost some upside momentum, as seen in Bearish divergence condition in 4 hours MASCD. As it's approaching a Key resistance level of 1266.5, so I will stay Neutral in here. On the Downside: a break of 1223.6, Key support, will be the 1st alert that rebound from 1155.6 is complete, and will turn the bias back to the Southside for 1211.7 support. The Big Picture: the stronger than expected rise from 1155.6, and its persistence softens my Bearish POV. But, again for now I am not Bullish but Neutral ahead of a break of 1266.5, the Key resistance. A break below 1211.7, the support, confirm that rebound from 1155.6 over, and reaffirms the case that the rally is the 2nd leg consolidation from 1266.5. But, a clear break of 1266.5 augurs that medium term rally is still running to 1300, a Key psych level from my POV The Long-term Picture: my earlier POV that 1266.5 is a major Top looks in doubt now. But, considering the Bearish divergence condition in the weekly MACD, a major Top may be near, even if it is not yet formed. I am expecting correction after Gold does Top out, with possibility of a breach of 1000, the Key psych support level. However, there is no indication that I can see of long term up-trend reversal yet. Having said that, I will maintain the long term Bullish POV and expect whole up trend from 1999 low of 253 to continue to 100% projection of 253 to 1033.9 from 681 at 1462 level after completing the anticipated correction. Stay tuned...