Way in advance of the release of the US payrolls data the gold market appeared to cast its vote on where on the numbers’ spectrum such statistics coming from the US Labor Dept. would reside this morning. Bullion prices gained nearly 2% in advance of the opening of the New York trading session and they did so despite a steady-to-rising US dollar and (once again) despite a loss of nearly 1% in crude oil and a decline in copper. In fact, the entire precious metals’ complex was trading significantly higher even as perceptions of the global slowdown appeared to impact sentiment (and prices) across the board in base metals and certain other (wheat, for example) commodities.
The betting that the Fed will continue to ease in order to avert the possibility of a deeper contraction now appears to be front-and-center on certain trading floors and it is looking less like a blind bet than manifest certainty. This, with nearly three weeks to go before the Fed has its say in the matter and a week before US President Obama outlines his plans to resuscitate the very numbers that appear to be obsessing the spec trade this morning. But, hey, what are markets for, other than to pool a bunch of sentiment, and anticipation and translate them into price action?
Said action encompassed a $35 gain in the yellow metal this morning as the market opened for business in New York. Spot quotes on the bid side came in at $1,859.00 the ounce as against a greenback still trading at near 74.50 on the trade-weighted index and a 90-cent loss in black gold (to $88.04 a barrel). Silver added $0.99 per ounce and it opened at $42.49 on the bid-side.
Platinum advanced strongly, adding $22 to last night’s closing quote to open at $1,867.00 per ounce. Palladium also climbed; it was $8 higher at $788.00 the ounce. Total US auto sales did come in at a better-than-expected level last month; more than 1.07 million cars and trucks rolled off dealers’ lots in August as compared to the 997.5 thousand that did so one year ago the same month.
The much-awaited August non-farm payrolls came in at…drum roll…flat (as in: zilch) and the US jobless rate came in at….another drum roll…unchanged (9.1%). The markets (at least in precious metals, as the Dow was still one hour from opening) immediately treated the figures with the implied conviction that they were bad enough to sway the Fed and prompt it into easing action.
As regards today’s Labor Department announcement on US job creation, it weighs perhaps more than even Jabba the Hut, and – at its worst level since September of 2010 – it is looking equally repulsive. The news release puts that much more additional pressure and significance on the content of what Mr. Obama will be sharing with his nation in next week’s address. As things stand now, the White House projects a US unemployment rate at 8.2% for the coming year – the highest such number for an election year since F.D.R. ran for, and was successfully re-elected back in 1936.