Yesterday European Central Bank President Mario Draghi reiterated his commitment to intervene in sovereign debt markets in order to reduce borrowing costs for struggling eurozone governments. This helped lift the euro, which is currently trading around $1.3000, just below a two-week high. However, the Spanish government’s continuing refusal to make a formal request for ESM aid is adding an element of uncertainty to eurozone proceedings. This request though is surely only a matter of time.
Today’s big market-moving event will be the monthly US nonfarm payroll numbers. Consensus forecasts expect gains of 113,000 payroll jobs, but for the unemployment rate to stay at 8.1%. Disappointing numbers will probably boost gold and silver, as traders start to price in even more Fed money printing. Better-than-expected numbers will probably boost stocks, but could temporarily push down gold and silver.
Wednesday saw some encouraging US data, with a better-than-expected rise in service sector orders, and encouraging private sector job gains seen in the ADP National Employment Report. Over the short-to-medium term, it wouldn’t be surprising to see a mini-boom in America. With the Fed flooding the banks with new money, it’s not exactly a stretch to think that more of this money will leak out into the broader economy, resulting in an artificial boom. “Artificial” because it will be a boom that’s not built on a solid foundation of increased savings. It will however result in the appearance of increasing prosperity -- though how quickly this illusion is overwhelmed by surging inflation and interest rates is the key question.
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U.S. Jobs Data Next Test For Gold
Published 10/05/2012, 07:43 AM
Updated 05/14/2017, 06:45 AM
U.S. Jobs Data Next Test For Gold
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