Metals react to jobs report; What is the Fed’s next move?


Precious metals prices are positive, after the jobs report showed only 69,000 new jobs were added for the month of May pushing the unemployment rate to 8.2 percent. “For those lucky enough to have a job, their spending power is sliding when accounting for inflation. The markets will respond negatively to this report,” Todd Schoenberger, at The BlackBay Group in New York, said. The market so far has reacted negative to this data, while it has given precious metals the encouragement it has needed to get back on its feet. The housing market will be affected by the weaker-than expected jobs report according to Doug Duncan chief economist at Fannie Mae. Duncan stated, “The recent trend is reminiscent of the monthly patterns of the spring slowdown witnessed over the last two years that continued through the summer months. If this pattern recurs, we expect that hopes for a meaningful housing recovery will be delayed once again.”

Gold rose above $1600 this morning responding to pessimistic U.S. data that was released. Richard Hastings at Global Hunter Securities said, “Gold reacts beautifully, and with the best price action, on U.S. troubles, and this morning’s wonderfully wobbly jobs data did the trick. Not only would there be more speculation about [a third round of quantitative easing] … but all of the data speak to tax revenue dilemmas due to growth limitations, and this means the U.S. budget comes back into focus. If this occurs, then gold could rally this summer. If neither occurs, then gold would remain under pressure due to the return of deflation.”

At 1:14 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,619.40, Up $55.70.
  • Silver, $28.66, Up $0.81.
  • Platinum, $1,436.10, Up $16.50.
  • Palladium, $613.00, Down $0.90.
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One thought on “Metals react to jobs report; What is the Fed’s next move?

  1. 99% sure Obama has a dinner date with Geithner to discuss QE3 in the next month. For selfish reasons this is great. For other reasons, they will be speeding up the collapse of the US economy.
    Of course there is always a World War that will pull us out of the economic tailspin
    HK

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