Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Fall on US Jobs Data

Commodities / Gold and Silver 2010 Sep 03, 2010 - 08:00 AM GMT

By: Adrian_Ash


Best Financial Markets Analysis ArticleTHE PRICE OF GOLD and silver fell hard for Euro and Dollar investors Friday lunchtime in London, with gold unwinding this week's 1.2% gains as world stock and commodity markets jumped in response to new US jobs data.

August's Non-Farm Payrolls surprised analysts with a headline drop for August of 54,000 – half the losses expected – plus stronger-than-forecast growth in private-sector hiring, up by 67,000.

"The private sector has net created a total of 622,000 jobs since last November," noted Deutsche Bank analysts ahead of Friday's announcement.

"This is still fairly low compared to the 8.459 million private jobs lost during the previous two years."

Overall, the US unemployment rate crept up to 9.6%, with average earnings rising more slowly than expected from a year earlier.

"[Gold] is what I call wealth insurance," said Peter Hambro, mining-magnate and chairman of London-listed Russia gold miner Petropavlovsk Plc, to Bloomberg earlier this week.

"Everyone has health insurance, fire insurance...Gold is what is going to protect you from the ravages of government...There is no way out for these guys except to inflate away debt.

"I'm afraid that unless you have some real assets, you're going to be in trouble."

Elsewhere on Friday, new data showed Swiss consumer prices stayed flat in August, while German and UK service-sector growth was slower than expected.

Retail sales across the 16-nation Eurozone rose by 0.1% from July, the official data agency said – just half the tepid rate of expansion analysts forecast.

"The truth is that we have not had much of a recovery in the first place," says New York professor and economics consultant Nouriel Roubini, writing for Forbes magazine, "which might prevent the economy from falling enough to display what many would label a double dip [in the US] – although we are now assigning a 40% probability to such an outcome."

Back in the gold bullion market, overnight trading in Asia was "cautious" according to one dealer's note, but the US jobs data promised "an exciting close to the week", especially with New York heading into the long Labor Day weekend.

Over in Mumbai, "There are no [gold] deals at these rates," said a state-owned bank dealer to Reuters this morning. "There is an initial resistance from traders to accept near-record prices."

Gold prices for Indian consumers – the world's No.1 buyers, now entering the strong post-harvest festival season – held just shy of recent records at 19,200 Rupees per grams on Friday.

Ahead of the peak gold demand typically seen during Dhanteras in November, "We are expecting festivals like Ganesh Chathurti and Navratri may bring in sales," said another dealer.

A Reuters poll of 10 analysts and dealers says Indian gold imports (it has next-to-no domestic gold mining output) will rise 5% to 504 tonnes in full-year 2010.

Elsewhere in the commodities market, New York crude-oil futures jumped through $75 per barrel on the US jobs data, with the broad hard-asset indices reversing an earlier drop to show a 0.5% on the day.

"We are bullish on silver," says the latest technical note from bullion-bank Scotia Mocatta, "looking for an eventual test of the 2008 high of $21.35 an ounce.

Silver traded wholesale in London today gave back 1.1% from a new four-month high at $19.76. Supporting its bullish stance, says Scotia, the Gold/Silver Ratio "broke lower" on Thursday through August's bottom, meaning that one ounce of gold is worth fewer ounces of silver.

Moving down to 63.75, the gold/silver ratio looks bullish for Silver Prices while it remains "below 64.90," says Scotia, "and we see April's low of 62.66 as the next major [level]."

By Adrian Ash

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
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 , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

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.

© 2005-2022 - 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