Gold Rallies Despite Jobs Report: Morning Market Update June 6

June 6th, 2014 by

Non-farm payrolls in the U.S. rose by 217,000 jobs in May, officially bringing the number of workers back to 2008 pre-financial crisis levels.  However, the labor participation rate stays stuck at a 36-year low of 62.8%.

If things don’t seem as bright and rosy to you today as they did seven and half years ago, back in 2007, you aren’t alone.

Contrary to expectations, gold jumped and the dollar fell on the release of the employment numbers. Things returned to expected behavior as profit-taking took over in gold and silver after weekly highs were hit, and the dollar rebounded back into positive territory. Platinum is slightly softer, while palladium is flat. This mornings jobs numbers helped keep European and U.S. stocks happy.

The IMF and World Bank are both warning China about loosening money supply, as Beijing eases reserve requirements for targeted banks. Select smaller banks that are lending to farmers and small businesses have had the amount of money they have to keep at the central bank as reserves lowered, while the percentage big banks have to keep there remain the same. The government is trying “targeted stimulus” to sectors that need it, while trying to restrict easy money from entering the “shadow banking” sector, and cooling down the housing bubble. As the world’s largest consumer of gold, the economic health of China is a concern for the bullion markets.

All is quiet in South Africa, as government-brokered talks continue between platinum mining companies and striking mineworkers, in a four month strike that has sent the entire economy into contraction, and meant nearly one million ounces of lost platinum production. Platinum had already been projected to have a supply shortage this year, before the strike.

by Steven Cochran

Gainesville Coins Portfolio Tracker and Financial News