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    JM Bullion Weekly Market Review (10/2/15)

    Gold is seeing a significant rally today as this morning’s release of the non-farm payrolls data left investors wondering what happened.

    The U.S. Department of Labor and statistics reported today that the U.S. added just 142,000 jobs in September. Consensus estimates were looking for 203,000 jobs added. The unemployment rate held steady at 5.1 percent. To add insult to injury, the prior two months also saw downward revisions of 59,000 jobs.

    The news hit stock futures hard, and the market saw some decent selling this morning before reversing course later in the session. The dollar index is losing ground today, while crude oil is slightly lower.

    It would appear that the questions surrounding an October rate hike by the Fed have been answered. In fact, the miss in today’s jobs data could very well have taken a hike off the table until next year. The idea of rates remaining at current levels for the foreseeable future likely fueled short covering in the precious metals complex. Although gold has held its recent lows, the bulls have yet to put together a convincing upside rally. In fact, sentiment surrounding the gold market has remained quite bearish. Today’s rally likely squeezed a lot of those bears out of short positions and gave the bulls reason to look at getting long.

    Stocks have done a 180 today and perhaps investors are now cheering on the notion of cheap money for longer. If stocks continue to rally based on the notion of rates remaining at current levels, investors may potentially remain hungry for risk and this risk appetite could potentially weigh on perceived safe haven instruments, such as gold.

    On the other hand, concerns over the health of the economy may take center stage and investors may elect to continue selling equities in the coming days. Should this prove to be the case, gold could potentially have room to run higher as investors seek out alternatives.

    Today’s jobs data may simply add to investor confusion over the timing of a hike by the Fed. Markets could potentially find themselves trading within a range until more clarity is seen.

    The gold bulls may now potentially target the recent swing high in the $1170 area. If this level is breached to the upside, the bulls may have room to run. A rapid move to the $1200 area could potentially follow and encourage more buying along the way.

    Should the dollar weaken in any significant fashion following today’s disappointing data, gold may also see renewed buying interest.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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