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
Friday Stock Market CRASH Following Israel Attack on Iranian Nuclear Facilities - 19th Apr 24
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
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

U.S. Non-Farm Data Sinks Gold, Bond Prices Set for Fed Tapering

Commodities / Gold and Silver 2013 Nov 08, 2013 - 02:29 PM GMT

By: Adrian_Ash


The PRICE of GOLD slumped $20 per ounce in 10 minutes Friday lunchtime in London, as the Dollar rose after much stronger than expected US jobs data.

Non-farm payrolls added 204,000 jobs net in October, the Bureau for Labor Statistics said, beating analysts' lowest prediction in a year of 125,000.

Dropping 2.5% from last Friday's finish, Dollar gold hit its lowest London Fix since 16th October at $1285.50 per ounce.

Silver also fell to a 3-week low, and also traded 2.5% down for the week, at $21.35 by mid-afternoon.

"The bar [was] set low," said a commodities note from Standard Bank just before the jobs data.

"If the outcome is better than consensus, we would expect gold, and other precious metals, to come under pressure."

World stock markets extended the day's drop, as did commodities.

German Bunds and other European debt prices fell, while US Treasury bonds fell so fast the annual yield offered by 10-year debt jumped 13 basis points to 2.73%.

That's the highest level in 7 weeks, since just before the US central bank surprised the markets by choosing not to "taper" the Fed's quantitative easing of $85 billion per month in asset purchases.

"Clearly the $1350 [level] didn't want to hold" in gold, says one London market-maker's trading desk in a note, reviewing recent action. "[Because] miners got busy selling production forward up there."

Australian gold miner St.Barbara said yesterday it has sold forward 7.5 tonnes of future production at a price of $1390 per ounce.

Small West-African producer Amara Mining this week sold 20% of its shares to a wealth management investor.

This year's slump in prices will start to dent the rise in world mining output from 2015, said a report this week from consultants MetalsFocus.

"With this [forward selling] in mind," that London trading desk's note goes on, "we can't really think gold will spike easily through $1350", which it now sees as a key level.

"Only longer-term holders shall be enticed to buy more gold while it's cheap. [But] at some point gold will catch up, strongly."

Meantime, "Gold faces downside risk in the near term," says a technical analysis from Barclays Capital.

"Although a small bid unfolds when priced in Euros, resistance near €1000 per ounce is a tough barrier."

Gold prices for Euro investors also fell on Friday's US jobs data, but less dramatically with a 1.3% drop.

One day after the European Central Bank cut its key lending rate to a new record low of 0.25%, the International Monetary Fund today urged newest Eurozone member Slovenia to recapitalize its banking sector "immediately".

Credit ratings agency Standard & Poor's meantime cut its long-term rating on France's sovereign debt from AA+ to AA, pointing to high unemployment and weak reforms by the government.

Further ahead, "Janet Yellen’s confirmation hearings [for the top job at the US Federal Reserve] are likely the next key event [to] have a direct impact on gold," reckons a note from Swiss investment bank and London bullion market-makers Credit Suisse.

"Given the market’s image of her as an uber-dove [favoring low rates and more QE] she is more likely than not to come across less dovish than expected during her testimony."

By Adrian Ash

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

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(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 - 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