Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Jobs Data Whip Gold Bullion Prices

Commodities / Gold and Silver 2013 Jun 07, 2013 - 07:12 PM GMT

By: Adrian_Ash

Commodities

GOLD and silver prices whipped sharply Friday lunchtime in London, as new US jobs data matched analyst forecasts with a 175,000 rise in Non-Farm Payrolls for May and a slight rise in the jobless rate to 7.6%.

Having touched 1-week highs above $1419 per ounce on Thursday, gold fell back through $1400 Friday as European stock markets erased earlier losses.


Silver lost and then regained 30¢ per ounce before falling again through $22.40, also near this week's lowest level.

"The market [had] the feeling that it wants to go higher," said one broker earlier Friday.

"While the technical downtrend is still in place," says bullion market-maker Scotia Mocatta in a technical note, "the trend is weakening as gold slowly grinds higher."

With gold still headed for a slight weekly gain, the 33 analysts, traders and retailers surveyed each week by Bloomberg's commodities team are "more bullish" than any time since March 22 – three weeks before the worst crash in gold prices in 30 years – the newswire reports.

Nineteen respondents expect gold prices to rise next week, against 8 bears and 6 neutral.

In the market, however, the number of hedge funds worldwide investing in gold fell from 310 to 290 between December and May, reckons EurekaHedge Pte Ltd., a Singapore-based consultancy, quoted by Bloomberg.

Latest data from US regulator the CFTC said speculative traders held the greatest number of bearish contracts on gold futures on record last week. Accounting for bullish bets, that move cut their net position as a group to a 5-year low equal to 171 tonnes.

Data for the week-ending Tuesday 4 June will be released after US markets close today.

Ahead of Friday's jobs report, a new research paper from the Chicago Fed said Thursday that the US economy needs to add 80,000 new jobs per month to keep the unemployment rate steady.

"It's time that we begin to gradually unwind [QE and zero rates]," said Philadelphia Federal Reserve president Charles Plosser – a voting member of the Fed's policy committee at alternate meetings in this year – on Thursday.

But markets have "over-reacted" to talk of tapering the Fed's $85 billion in monthly QE, he said.

"The markets seem to take this very seriously at some level, which I think is probably a mistake."

The Federal Reserve has said it will only consider raising interest rates when the jobless rate falls below 6.5%.

After the European Central Bank left its policy unchanged yesterday, France's trade deficit and government deficit both showed a rise for May in new data Friday morning.

German industrial output surprised analysts by growing 1.8% month on month, but the Bundesbank today cut its forecasts for economic growth from 0.4% to 0.3% for 2013, and from 1.9% to 1.5% for 2014.

"Weak credit trends in the Eurozone," says Standard Bank's currency strategist Steve Barrow, "reflect themselves in continued recession and low inflation.

"[So] we expect the ECB to cut rates further, possibly as soon as next month."

"The European banks had no choice but to shrink their balance sheets and sell assets," Reuters quotes a "senior source" commenting on the dramatic fall in lending to commodity traders since 2011.

With Europe's share of global commodity lending now down on one estimate from 75% before the Eurozone crisis to 50%, "I can't see them becoming dominant again," the newswire quotes Jean-Francois Lambert, head of commodity trade finance at HSBC.

Meantime in India – the world's heaviest gold-buying nation – the government's new campaign against household gold demand was challenged today by the jewelry industry, as well as market analysts.

"We are with the government on the need to reduce the current account deficit," the Wall Street Journal quotes but not at the cost of damaging the industry," chairman of the All India Gems & Jewellery Trade Federation, Haresh Soni.

"The recent round of initiatives to put a check on imports," says Pankaj Parekh, vice chairman of the Gem & Jewellery Export Promotion Council, "will make lives of small and medium jewellers difficult in the coming days."

Some 3.5 million people work in India's gold and jewelry sector, says theEconomic Times, with 80% of them living in Bengal province.

But "The [government] knows they can't control jewellery demand," says Motilal Oswal analyst Kishore Narne to the Financial Times.
"They probably just think they might as well make some money off it."

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Formerly 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 2013

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

© 2005-2022 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