From the Trading Desk
Friday’s US non-farm payroll figure came in significantly worse than expected with employers adding the fewest number of workers in almost six years during the month of May. The USD tanked and gold skyrocketed as the markets pushed back expectations of a Federal Reserve rate hike in June. Gold was already on tenuous ground after trending lower all of May and the poor payroll figure was the catalyst it needed to catch bids. It rallied all the way up to its 50 day moving average at $1,246, a level that has capped the yellow metal for three consecutive days now.
Federal Reserve Chairwoman Yellen spoke yesterday and tried to placate the markets following Friday’s weak employment data. She stressed that the Fed will raise rates in the relatively near future but market participants have all but dismissed the possibility of a rate hike in June now. Physical demand remains subdued in gold and rallies will likely be sold into as gold approaches $1,250.
Yesterday I said I slightly lean bullish gold and silver. Today I am more bullish. I think we are still moving higher overall for the short term. Nothing has changed with my view of long term and the dollar will lead gold higher as it falls from this level as it did today, which the mining stocks finally picked up on as the day progressed.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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