Gold Price Down With Jobs Report

Wednesday, 03 April 2013
Written by  The Street
Published in Gold Investing
Gold prices were down again, this time not as bad though, as weaker than expected jobs data came to light. Softer growth in March was the main culprit of the yellow metal’s drop this time around, though it only dropped by a couple of dollars.


Gold for April delivery at the COMEX division of the CME was down by $2.50 to come in at $1,573.40 an ounce. Gold price traded as high as $1,577.30 and as low as $1,563.10 an ounce, while the spot price of the yellow metal was down by $2.80.

ADP let known its March report today and in the report numbers were down much more than expected. While number of jobs actually rose, the rise was not as much as was thought, thus forcing the metal down some. ADP reported private-sector employment rose by 158,000 in March, which was less than the 200,000 that economists surveyed by Thomson Reuters were expecting.

Wednesday marked the second-consecutive losing session for the yellow metal. On Tuesday, gold plummeted as more investors continued to seek higher returns from surging equity markets. The yellow metal took less of a hit today, but remained down below that psychologically important $1,600 per ounce price point.

The Federal Reserve's dual mandate to combat a rise in inflation and steer the economy toward strong job growth has led gold investors to keep an eye on important labor data.

Strong labor statistics -- monthly nonfarm payrolls, the monthly ADP report and initial jobless claims, among others -- offer a sense of overall economic health in the United States. And as the Fed has marked a 6.5% unemployment rate as a threshold to possibly begin raising the short-term federal funds rate, precious metals traders have used jobs data to gauge the need to exit or increase holdings in gold.

We will need to see stronger jobs reports in the coming months if gold and other investments are expected to make a turnaround. We will see how this plays out, as most of us continue to look for gold to gain some sort of a foothold in 2013 and jump in price.

Original Article: The Street

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