Payrolls Hit Gold

Published by Filipe R. Costa on Mon, 05/11/2012 - 10:09
gold bubble

Daily Market Commentary for November 5: Non-farm payrolls numbers released last Friday showed a better-than-expected improvement in the U.S. job market but the mood is negative among investors and equities ended lower. Gold was hit again and is currently submerging to $1,675.

Non-farm payrolls rose 171,000 in October, a number that is an improvement over the last period and above the high end of the estimate range. Unemployment rose a little from 7.8% to 7.9% but that was the result of more people entering the job market, a signal of confidence in future prospects rather than a problem. Retail was one of the most favoured sectors, manufacturing was also able to revert last month’s loss but government contributed negatively this time.

The initial reaction to the numbers was very positive with the Dow rising to near 13,300 but during the session all gains were eroded as investors continue to point all attentions to the U.S. election to be held tomorrow and to all uncertainty surrounding it. The fiscal cliff is one of the major concerns at the moment and how Obama or Romney will deal with it is a complete uncertainty.

This morning there is a continuing weakness and the Dow is testing a dive below 13,000. For now it is surrounding 13,050 but if weakness continues it may well test the support at 13,000. In the UK we have the FTSE quoted around 5,828. It seems that 5,850 continues to be a reference point and the market goes up and down but always ending close to that reference. This is a consequence of a lack of stimulus for investors to buy equities and we still have to see wether this year will have a December’s effect pushing equities higher or not.