London Gold Market Report
from Adrian Ash
Fri 6 Dec 08:55 EST
Gold Reverses Sharp Drop on Strong US Jobs Report, Short-Covering “Now in the Air”
WHOLESALE gold in London reversed a sharp drop Friday lunchtime, recovering a $20 plunge on the release of US jobs data to trade back above $1230 per ounce, heading for a 1.7% drop on the week.
Versus analyst forecasts of 180,000 net hiring last month, the US economy added 203,000 jobs according to the official Non-Farm Payrolls report.
The unemployment rate felling to 7.0% in November.
Commodities had earlier ticked higher with European stock markets, which were heading for near-3% weekly losses.
Priced in Dollars, gold started afternoon dealing in London 1.7% below last Friday’s finish.
The Euro currency meantime fell hard from 5-week highs to the Dollar, helping gold for Eurozone investors move back above €900 per ounce, a 3-year low when hit earlier this week.
Silver also whipped with gold, rallying back above $19.40 to head for a 2.5% weekly fall.
“Short covering is now in the air,” one Asian trading desk said earlier, after Wednesday had seen bearish speculators being forced to close their bets by a $25 spike on the private-sector ADP jobs report.
Economists’ language “has now turned to suggest Fed tapering will hit US bonds most directly,” the note added.
The US central bank, said Dallas Fed president Richard Fisher on Thursday, should now “define a very clear path…once we start tapering…as to when we reach zero” from the current monthly QE of $85 billion. [Read more...]