It will be very interesting to hear what the Fed presidents NOW have to say after this very weak May jobs report. Only 38,000 jobs were created in May, way below the 160,000 jobs number the street had expected. Also reported today, revisions to the March and April jobs number, adjusted down a combined 59,000 jobs. May’s job number was the lowest since September 2010.
As soon as this very unexpected number was released, gold exploded to the upside from $1,212.00 to $1,238.60 in the August contract. In my opinion, this not only takes a June rate hike off the table, but the number was SO bad, it handcuffs the Fed from even considering a rate hike in July.
As I’ve been indicating from the start of year, I don’t expect any rate hike in 2016 because I believe the data will not be there to support a rate hike as the U. S. economy slows down. Looking in the rearview mirror, let’s not forget that weak first quarter GDP report up .5 percent then adjusted later to .8 percent. And now this news, it would be a complete shocker to the markets and destroy any credibility the Fed has, and that’s not much these days, if they pull a surprise in either June or July. I can’t imagine how the markets would react. Scary.
Gold ETFs back in the news today as we witnessed a modest inflow yesterday.
Besides the big news in the Gold and Silver markets today, we are watching the Dollar Index getting hammered off this weak data, down 1.40.
All this news giving Gold and Silver the boost we all were hoping for.
Author Name: Walter Pehowich
Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.