Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold Prices Wrong-Footed as US Payrolls Sink

Commodities / Gold & Silver Apr 04, 2008 - 11:54 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES dipped, bounced and then fell back again from a four-day high early Friday on news that US job losses exceeded expectations last month.

Non-Farm Payrolls for March showed a loss of 80,000 jobs vs. Wall Street forecasts of 50,000 cuts. Even the ever-bearish Briefing.com had penciled in only a 70,000 fall.


But within 15 minutes of the Bureau of Labor Statistics adding that US unemployment rose for the third month running to a new three-year high of 5.1%, the Gold Price had dropped back to the bottom end of the day's trading range.

The Euro, Yen and Sterling also spiked and then dropped. European equities cut their gains for the day.

"US non-farm payrolls data are important for the Gold Market , especially after yesterday's [worse than expected] jobless numbers," noted Simon Weeks, head of precious metals dealing at Bank of Nova Scotia, before the payrolls report was released.

"Gold still has room for more correction, but may stabilize if the Dollar remains weak."

But Gold Prices already looked vulnerable in thin London trade. The better-than-expected ADP Employment Report – often a good indicator of the official non-farm jobs data – said on Tuesday that private US payrolls added 8,000 jobs last month.

It had been slated to show a 45,000 loss. Gold Prices sank to a two-month low of $875 per ounce on Tuesday's news.

"Following the surprise 8,000 unit increase in employment reported on Tuesday," says today's Gold Market note from Standard Bank, "US initial jobless claims rose by 38,000 [in Thursday's data release] to 407,000, 11.2% higher than expected."

Meantime in Asia today stock markets fell for the first time in three days while US crude oil gained 90¢ to $104.73 per barrel.

Base metals were mixed, and soft commodities rose across the board, as Tokyo Gold Prices for Feb. '09 delivery ticked above ¥3,000 per gram, recovering Monday's opening level as the week ended.

Gold priced in Yen still stands 10% below the 25-year peak of early March, however.

The British Pound briefly touched a one-week high to the Dollar above $2.00 this morning, capping the Gold Price in Sterling at £453 per ounce in London before surging to $2.050 and then falling one cent lower inside 10 minutes.

French and German investors looking to Buy Gold today also found price little moved by the jobs data, holding just above €576 per ounce the Euro first spiked and then swiftly retreated from a new four-day high of $1.5770.

The European single currency had already recovered most of the week's early plunge on news that German factory orders in Feb. – while lower from Jan. – rose 9% from the same month in 2007.

Added to this week's new 16-year high in Eurozone inflation, that looks likely to keep interest rates on hold at the European Central Bank.

Whereas the likelihood of the US Federal Reserve following up its 300-basis-point cuts to Dollar interest rates with further cheap money only grew on the weak jobs data.

"The US labor market data leads often to the widest swings in financial markets, which would also have a strong impact on gold and other precious metals," said a report from analysts at Dresdner Kleinwort early Friday.

"Gold [was] expected to profit from a higher-than-predicted fall of payrolls."

But in the end only Treasury bond prices rose, pushing yields lower after interest-rate traders had cut the odds of a sharp fall in the Fed's key lending rate on Thursday.

"Monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year," said Bernanke in testimony yesterday to the US Senate Banking Committee.

Fixed-income traders took this to mean a promise of better growth and so "the market priced out some of the rate cuts that were there a few weeks ago," according to Piet Lammens at KBC Bank in the Netherlands .

The Fed shows little concern for inflation, however, and this week's growing consensus that Ben Bernanke's team are done cutting rate ignores the 1% "emergency low" reached during the much milder deflation panic of 2001-2004.

At its current lending rate of 2.25%, the Fed is offering cash savings sharply way less than the latest rate of consumer price inflation, reported at 4.3% in Feb.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2008

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Adrian Ash Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules