from Gold Silver Worlds:
Gold was trading sharply higher on Friday after the US monthly jobs report showed fewer jobs were added in the economy than expected. This encouraged traders to take some profit on their long dollar positions, causing buck-denominated assets to rally. But we remain skeptical how high gold can go from here, for the jobs report wasn’t that bad. After all, the unemployment rate edged lower to 5.8% thanks to another 200-thousand-plus increase in non-farm employment. Ignoring today’s bounce, gold has dropped to a low so far of just under $1132 per troy ounce since reaching $1255 about three weeks ago.
To put things into perspective, it has fallen almost 10% during this period, which is obviously a huge move. Most of the losses have been due to the US dollar, which has surged higher following last week’s hawkish FOMC statement and increasingly more dovish central banks elsewhere in G10. The Bank of Japan’s surprise decision to expand its asset purchases program last week was followed by a dovish European Central Bank meeting on Thursday. At the follow up monthly news conference, Mario Draghi said the ECB is prepared to act more aggressively to combat deflation threats if needed and that the policy makers were unanimous on this view.
Please follow SGT Report on Twitter & help share the message.