Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold tumbled 2.3%, its largest one-day drop since late April, after the U.S. non-farms payroll report beat expectations. The economy created 175,000 jobs last month, slightly more than the 164,000 forecast by economists and the 149,000 (revised down from 165,000) created in April. While still well below the 200,000 per month mentioned by some members of the FOMC as the minimum necessary for a change in monetary policy, today's number nonetheless stoked concerns about reductions in quantitative easing, causing funds to shift from safe-haven assets like gold and silver into equities and the dollar. The Dow added 200 points and the Global Dow rose by 0.8%. Silver fell especially hard, dropping 4.3%, while platinum and palladium lost 1.8% and 0.1%, respectively.

At the Comex close: August gold fell $32.80 to $1,383; July silver fell 96 cents to $21.74; July platinum dropped $26.70 to $1,502.60; and September palladium slipped $1.10 to $761.20 an ounce.

In reality, today's tepid jobs numbers are unlikely to cause the Fed to taper easing. The rate of unemployment actually rose to 7.6%, if only because of greater participation in the labor force. Unemployment would be a stunning 11.4% if the participation rates returned to the level of January 2008, according to James Pethokoukis of the American Enterprise Institute. And the unemployment rate is a whopping 13.8% if everyone who wants a full-time job but can�t find one is included. More than half of the added jobs pay less-than-average wages, a development that may constrain consumer spending and therefore the recovery. And the recent trend-line for job gains remains downward, despite May's minor up-tick. Bloomberg reports that gold traders are the most bullish in two months, seeing recent technical corrections as being overdone.