Gold Rallies Modestly Despite Upbeat U.S. Jobs Report

New York (June 6)  Gold prices are trading steady to slightly higher in the immediate aftermath of a U.S. jobs report that showed non-farm jobs rose a bit more than expected. Gold traders and investors have apparently reckoned their metal’s prices had fallen too far during the recent sell off and the market deserves at least a short-covering bounce. August Comex gold was last up $1.90 at $1,254.60 an ounce. Spot gold was last quoted up $1.00 at $1,254.75. July Comex silver last traded down $0.023 at $19.06 an ounce.

Friday morning’s U.S. employment report for May showed a slightly higher than expected rise of 217,000 in non-farm payrolls. The key in the report was forecast to rise by 210,000.

The U.S. stock markets are hovering at record or multi-year highs to end the trading week. Meantime, European stocks and government bonds have rallied late this week.
A new and aggressive European Central Bank monetary policy stimulus package announced Thursday and dovish corresponding remarks from ECB president Mario Draghi were deemed stock market and European bond market bullish. Worries about stagnant European Union economic growth and deflationary price pressures forced the hand of the central bank. The ECB move on Thursday has bolstered the notions of some in the market place that the U.S. Federal Reserve may be forced to back off its plan of “tapering” its quantitative easing. It seems incongruous in this age of integrated world economies and markets to have the European Union stimulating its monetary policy, while at the same time the Fed is reeling in its monetary easing.

Source:  FORBES