Gold Price Drops Hard After Jobs Report Release

New York (Aug 7)  Last week’s review of the  macro market indicators noted that heading into August the Equity markets still looked strong but the smaller cap and technology laden indexes stronger than the large caps. Elsewhere looked for gold to continue its uptrend while Crude Oil continued lower. The US Dollar Index looked better to the downside short term while US Treasuries ($TLT) were biased higher.

The Shanghai Composite looked like it will continue to drift lower while iShares MSCI Emerging Markets (NYSE:EEM) moved higher. iPath S&P 500 VIX Short-Term Futures Exp 30 Jan 2019 (NYSE:VXX) looked to remain at abnormally low levels keeping the bias higher for the equity index ETF’s SPDR S&P 500 (NYSE:SPY), iShares Russell 2000 (NYSE:IWM) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ). Their charts showed real strength in the QQQ with the IWM ready to join it moving higher, while the SPY (NYSE:SPY) takes a pause.

The week played out with Gold probing lower before dropping hard after the employment report to end the week down while Crude Oil started lower but rebounded late in the week. The US Dollar moved slightly higher after a lower start while Treasuries pulled back slightly and consolidated. The Shanghai Composite found support and reversed higher while Emerging Markets drifted higher. Volatility made a new 1 year low to end the week at an extremely low level.

The Equity Index ETF’s started the week higher but then quickly reversed lower. A second reversal Wednesday had them racing higher, adding speed after the employment report Friday morning. This left the SPY with a new all-time high, the QQQ pennies away from an all-time high close and the IWM at a 52 week high but still about 5% below the all-time high.

Source: Investing.com