Gold Tumbles to 2-Month Low On NFP

October 6th, 2017 by

The precious metals struggled to find their footing as markets opened on Friday. After failing at its 100-day moving average on Thursday and giving up previous gains on the day, spot gold slid to a two-month low this morning, trading 0.2% lower to about $1,265/oz. Spot silver was down 2¢ per ounce to $16.56/oz.

After platinum was flat during trading on Thursday, palladium surged nearly 2% to retake the lead between the two Platinum Group Metals. Both were near unchanged early in the trading session on Friday.

Here are Thursday’s closing numbers:

Gold: $1,267.80/oz (-$6.80, -0.53%)
Silver: $16.58/oz (+1¢, +0.06%)
Platinum: $913/oz (unchanged)
Palladium: $934/oz (+$18, +1.97%)

Dow Jones: 22,775.39 (+113.75, +0.50%)
S&P 500: 2,552.07 (+14.33, +0.56%)
Nasdaq: 6,585.36 (+50.73, +0.78%)
DXY: 93.91 (+0.39, +0.42%)
WTI crude: $50.80/bbl (+82¢, +1.64%)

The Department of Labor reported that nonfarm payrolls dropped by 33,000 in September mainly due to the impact of multiple hurricanes that hit the U.S. during the month. It marked the first time that the measure of nonfarm employment has fallen in seven years—since September 2010.

Economists believe the storms in the Gulf of Mexico and the Caribbean could ultimately drag third-quarter GDP down at least 0.6% lower, resulting in quarterly growth that is perhaps as low as 1.8%.

One bit of encouraging data from the NFP was that wages increased 2.9% year-on-year, the fastest clip thus far in 2017.

However, yet another major storm, Tropical Storm Nate, is currently on course for the Gulf Coast.

Wall St opened lower on Friday as stocks finally appeared to ease off of their all-time highs. The euro, pound sterling, and yen all lost ground against the dollar, which traded 0.2% higher on the DXY index, just shy of 94.2. Bonds saw a swift selloff in the U.S., pushing the 10-year Treasury yield back up to 2.39%. Markets in Asia and Europe were mixed.

Investors should be somewhat alarmed by the fact that the VIX, the most popular volatility index, fell to its lowest ever yesterday. While this is evidence that the markets have been eerily calm for the better part of the last several years, it could also prove to be an ominous sign. Volatility often disappears right before a period of market stress—a kind of “calm before the storm.” A plunge in volatility characterized the period right before the dot-com bubble and the most recent financial crisis, for example.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.