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Jobs Report Bursts A Strong Precious Metals Week

Jobs Report Bursts A Strong Precious Metals Week
Category: Market Reports
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Posted: 08-05-2016 04:48:00 PM

As of this writing, fully one quarter of all global bonds are offering negative yields. Many experts are openly predicting a steady march of $1,500 per ounce over the next six months. 

It’s Friday, and up until this morning’s jobs report (more on that later), the week just kept getting better and better in the precious metals market. Yesterday saw news reports both at home and abroad predicting the continued strength of gold as an investment.

Let’s start overseas as we continue to see sustained fallout from England’s Brexit decision back in June. It’s a pretty gloomy financial outlook for Britain, as the Bank of England just slashed its main interest rate down to 0.25%–a record low. In response, the Bank has begun quantitative easing procedures of its own by expanding government bond purchases. So far, the Sterling has dropped another 1.5% in value, but spot gold shot up 0.5%.

Outlooks such as this one continue to prop up gold on the global stage. As of this writing, fully one quarter of all global bonds are offering negative yields. Many experts are openly predicting a steady march of $1,500 per ounce over the next six months. And with gold up 29% YTD, it sure seems possible that this ride will continue.

Lastly, geopolitical events around the world are still causing enough regular concern to continue lifting gold to new heights. What we’re seeing is this–the demand in the global currency markets has so far allowed gold to witness the biggest rally in U.S. dollar terms since 2008. That’s big.

BUT now for the big news on America’s shores this morning. U.S. job numbers are in and they are big. The Labor folks report 255,000 new jobs for July, a much stronger rate from just two months ago. To put into perspective how big a surprise this is to the experts, economists in a Reuter’s poll had predicted an increase of just 188,000 for July. And this is the second straight month of job growth. All eyes and ears will be on Janet Yellen later this month when she addresses the Jackson Hole monetary policy symposium as this sustained growth is once again inspiring talk of an interest rate hike later this year.

The precious metals market responded to news by stepping off their strong numbers. Here’s a look at the stats:

  • Gold-The yellow metal dipped more than $10 an ounce. Currently holding in the mid 1,340s
  • Silver-The metal is sticking its toe below the $20 mark, a place it has rarely visited over the past month.
  • Platinum-Another metal that dipped more than $10 when the jobs report was announced, but it is still hanging tough well above $1,100
  • Palladium-After spiking above $700, Palladium slumped this morning to just below that number on the jobs news.
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About The Author

Walter Pehowich Author Name: Walter Pehowich
This editorial has been prepared by Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not prove to be true, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. 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. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept the foregoing.

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