February gold settles 1097.9, up $37.70 for the week of January 4th through January 8th
Gold prices fell Friday but still finished the week with a 3.6 percentage gain, which was gold ‘s best weekly finish since August of 2015. Jitters over the Chinese economy had spooked global stock markets earlier this week, sending investors sprinting to safe-haven assets, thus pushing gold sharply higher. Investment appetite for bullion also showed signs of picking up this week. Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares (N:GLD), rose 4.2 tonnes on Thursday, data from the fund showed.
Spot gold traded up to a two month high in early trading Friday morning but fell back sharply this morning in front of the unemployment release and amid a recovery in Chinese equities after Beijing allowed some appreciation in the yuan. The precious metal has historically been the most sought after in a risk off environment, and that was certainly the case this week after a major slump in the Chinese stock market. It is important to realize that external fundamental rallies like these are usually short lived unless they ignite a full blown crisis a la 2008. Should the relief rally that we saw Friday in China be short lived and U.S. earning season disappoint, Gold could be set for further gains. The Labor Department said non-farm payroll employment climbed by 292K jobs besting the median estimate for a 200K gain for December 2015. The report also upwardly revised October and November for the better as well. The unemployment rate held steady at 5 percent. The jobs report culminated a disastrous week for stocks which resulted in the worst opening week to start the year for stocks ever. Clearly today’s jobs numbers raise sentiment off another rate hike in March.
