Friday’s Jobs Report Could Spur the Fed to More Quantitative Easing

The Federal Reserve Committee has never taken QE3 off the table. The possibility of additional quantitative easing has remained an option should the circumstances warrant it. Many analysts see the dismal jobs report on Friday as just the sort of circumstances that will trigger the next round of easing. Not only was the 69,000 new jobs added very disappointing, but it was all the more lackluster considering the numbers from prior two months were lowered. Dennis Gartman speaking on CNBC this morning said there is a 100% chance of further Fed easing. Frank Lesh, broker and futures analyst with FuturePath Trading said, “Now that it appears the U.S. may have to act with Europe. That just means throwing more money at it. That’s just what gold wanted to hear.”

The call for central banks to take action is not just here in the U.S., but is being heard worldwide. Bond yields have declined and the global stock markets continue to go down. John Noonan, Senior Foreign Exchange Analyst with Thomas Reuters said, “Synchronized monetary easing could happen as early as even this week, as central banks of Australia, England and Europe meet.” According to Michael Gayed, Chief Investment Strategist at Pension Partners, this could be a do or die moment for central banks. U.S. bond yields out at their lowest levels since post-Lehman days, which is a sign the market is expecting QE3 from the Federal Reserve.

Gold is holding on to Friday’s gains in early morning trading. Friday was the biggest one day advance since last August on investor risk aversion and the greater expectations for worldwide monetary easing.

At 9AM EST the APMEX precious metal prices were:

  • Gold price -$1,620.70 down 90 cents
  • Silver price – $28.41 – down 19 cents
  • Platinum price – $1,438.80 up $3.60
  • Palladium price – $612.20 down $1.80
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