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Jobs Report Prompts Negative Gold Response

Jobs Report Prompts Negative Gold Response
Category: Market Reports
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Posted: 12-02-2015

Silver continues to be the choice of the majority of people buying precious metal products.

ADP reported jobs up 217,000 this morning, giving the Fed another positive sign that it’s OK to raise interest rates at the next FED meeting in December. The FED’s Lockhart said this morning that the upcoming FOMC meeting may be “historic.” If they decide to raise rates, this will be the first increase in the policy interest rate in nearly 10 years.

Gold reacted negatively as the jobs number was published, trading down $5.00 in the February contract to $1,157.60. The price of Gold still remains on the lower end of the recent trading range. Technicians report that the next level of support on the chart is $1,050.00. The question remains, what will it take to move the yellow metal out of its recent price consolidation.

Let’s look to what events recently have moved the price of Gold. ISIS events in the news creates a bid in Gold, while talk about a rate hike creates a sell off. This shows the market is very sensitive to any news but NONE of the stories seem to have a major impact on the price. So we just slide back and forth between the recent highs and lows.

Retail demand continues to be strong, BUT it’s not coming from the investment community. The retail investors who have portfolios in stocks and bonds continue their love affair with strong dividend paying stocks. As I reported in my previous comments, the average financial advisor will not recommend to a client to buy Gold at these levels.

Silver seems to be resilient to any news and seems to be very happy staying above $14.00. But I do expect downside pressure to build in Silver if Gold breaks below the $1,055 area. Sorry Silver you had your day in the sun. However, Silver continues to be the choice of the majority of people buying precious metal products.

After the FED’s meeting in December, I expect we will have some real clarity on where the price of Gold will be headed in the new year.

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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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