Gold Modestly Rebounds On Jobs September 6, 2019 Gold modestly rebounds on Jobs report this morning that shows lackluster growth. The bounce back follows biggest one-day drop in dollar terms in almost three years on Thursday. The Labor Department’s just-released U.S. employment data for August showed the “non-farm” payrolls rose 130,000, which significantly misses the market forecast of 150,000. This could indicate a cooling economy which is music to the ears of monetary policy doves, who are looking for a rate cut when the FOMC meets in less than two weeks. The most-active December gold contract had tumbled 2.2% to $1,525.50 an ounce on Thursday, its lowest settlement in two weeks. But after this morning’s news, finds the December contract up at $1,535.20. Yesterday, news that the U.S. and China had agreed to work toward a fresh round of trade talks next month and stronger-than-expected U.S. economic data had caused the yellow metal to lose some of its luster as a hedge against uncertainty. Equities rallied, with the Standard & Poor’s 500 Index increasing 1.3% Thursday, and the Dow Jones Industrial Average gaining 1.4%. Investors are awaiting further signals on the state of the economy and hints about monetary policy Friday from a scheduled speech by Federal Reserve Chairman Jerome Powell and the release of a key economic indicator – the monthly U.S. jobs report for August. Precious metals climbed in August amid uncertainty over the U.S.-China trade war, fears of an economic recession, speculation of upcoming interest-rate cuts and negative bond yields. The CME FedWatch Tool put the probability of a Fed interest-rate cut on Sept. 18 at 92.3% late yesterdday, but after this morning’s jobs report, the chance of a cut rose a tad to 94.6%. Harry Tchilinguirian, head of commodity research at BNP Paribas SA, said in a note earlier this week that the yellow metal is likely to surge above $1,600 an ounce as the Fed cuts rates four times between this month and June 2020 and investors seek safe-haven assets, Bloomberg reported. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.69% to 889.75 metric tons Thursday from Wednesday, Reuters reported. Meanwhile, the retail price of physical gold in Japan climbed to its highest level in almost four decades on Thursday in a surge spurred by fluctuations in the value of the yen along with the quest a hedge against uncertainty, Reuters also reported. Silver’s drop Thursday outpaced gold’s, with the December contract plummeting 3.8% to $18.81 an ounce on Comex. Silver is up 2.5% so far this week. Spot platinum and spot palladium were both lower early Friday. Platinum tumbled 2.8% Thursday, while palladium gained 0.3%. Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.