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Gold Retreats on NFP Beatby Peter A. Grant
Mar 08, AM 
Gold has slipped to new two-week lows in the wake of better than expected U.S. jobs data. Nonfarm payrolls for February came in at +236k, well above market expectations of +152k and a whisper of +200k. The jobless rate dropped to 7.7%, the lowest level since December 2008.The dollar and stocks rose on the news, adding to the euphoria surrounding this week's move in the Dow to new nominal highs. Perhaps not surprisingly, talk about the Fed removing accommodations abounds once again. This despite quite adamant declarations by both chairman Bernanke and vice-chair Yellen that the Fed would maintain their accommodative stance well into any recovery. IMF chief Christine Lagarde, in reaction to the ECB holding steady on rates despite a recession and record high unemployment, suggested there is still "some limited room for the ECB to cut rates further." Lagarde noted that while the sense of crisis has been mitigated to some degree, she remains concerned about "depressingly familiar" underlying issues. She seems hopeful that Germany will accept higher inflation and wage growth as a means to restore balance to the eurozone. The dollar pushed above 96.00 versus the yen, levels not seen since August 2009. With the yen under additional pressure, the yellow metal has surged back above ¥152,000 for the first time in two weeks. More than 50% of the recent modest correction has been recaptured. The bull market against the yen at least is alive and well. As I've pointed out on a number of occassions this week, the age of easy money and negative real interest rates is going to persist for some time to come. With that being the case, gold remains a sound hedge and haven. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here. |
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