The bears continue to be in charge as precious metals are looking at sharp losses this morning as the USD continues to strengthen. While the surge in physical demand has continued throughout this week, it has not been enough to take on the speculative short sellers and the long positions that continue to be liquidated.
Volatility in U.S. equities this week, a rally in bonds, and news that China will continue increasing gold reserves were all supportive this week and may have accounted for some of the shorts locking in profits, but those positions are likely being put back on this morning as the market reacts to a very strong U.S. employment report. Job creation in September was very strong as 248,000 new jobs being created brought the unemployment rate down to 5.90 percent, which is the lowest rate we have seen since 2008. The strong economic data is weighing very heavily on precious metals and most commodities as gold has fallen below $1,200.00 and targets crucial support in the low $1,180.00s.
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