From the Trading Desk
US jobless claims and unit labors costs data came in weaker than expected today, but the USD shrugged off the disappointing figures and continued its march higher. The USD index is approaching multi-month highs and gold is feeling the pain as a result. Gold fell for the sixth consecutive trading session today and is tenuously floating above psychological support at $1,100. Should this area give, it will likely be a swift move down to major support at $1,075, the low from this year as well as the five year low. Federal Reserve Bank of Atlanta President Dennis Lockhart commented at a central bank conference in Switzerland that an interest rate hike would soon be appropriate. This commentary encouraged further short selling of gold today. Be sure to keep an eye out for US unemployment rate and non-farm employment change data out tomorrow at 5:30 AM PST.
We continued to see gold get hammered as well as the mining stocks which I have seen this week many, many, turn red on my indicators. I have been hesitant with those who purchased the Mining Package from us to make a call to jump in and we are seeing the weakness I have been predicting for some time coming home to roost. Tomorrow’s jobs report should be the nail in the coffin that will put gold eventually below $1,000 an ounce.
Dollar closed at 98. It will shoot to 99 then 100 on a good jobs report. Gold will test its 52 week lows.
Stock market should fly higher.
That’s where I am leaning.
I have to buoy all my negativity with some reality that once we bottom, there are a multitude of reasons why gold will fly higher. One is the incompetence of Congress who from their own data site and charts says that 9 out of 10 years of deficits is a “balanced budget.” I took their chart and tweaked it for my book “Illusions of Wealth” and the result is below.
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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