Gold in New York held its own against a stronger dollar yesterday, closing down only $3, and saw strength build overnight. Already at a three-day high before the COMEX open, gold gained sharply at 8:30 when non-farm payrolls came in 8,000 jobs under consensus. Buy stops were triggered, taking the yellow metal to the $1,300 mark.
Silver hitched its wagon to gold's star and came along for the ride, while the dollar plummeted into negative territory from a five-week high.
The Labor Department reported that 192,000 jobs were added in March, and the unemployment rate stayed steady at 6.7%. This was almost exactly what the ADP private sector payroll report earlier this week had predicted, but a good bit below the 200,000 analysts expected . The labor participation rate increased slightly, to 63.2% from 63%, as more people who had given up hope began looking for a job once again. Payroll numbers for February were revised up by a whopping 22,000, to 197,000.
Wall St. opened in the green on the news, looking to eke out another high and put a disappointing first quarter behind them. European stocks are logging the eighth straight day of gains, on U.S. payroll numbers, and dovish statements by U.S. Federal Reserve chair Janet Yellen and European Central Bank president Mario Draghi.
In Tokyo, the Nikkei eased very slightly, on worries that U.S. jobs data wouldn't measure up to expectations, but losses were minimal as rumors that the Bank of Japan may introduce more stimulus measures circulated. Hong Kong's Hang Seng index fell as tech shares gave up recent gains. The Shanghai exchange finished the day in the green, riding the government's recent plans to target the nation's railway system for improvement and modernization.
As the bull market in stocks grows older and slows down, more analysts are advising investors to take some of their gains and diversify their portfolios ahead of the inevitable correction.
Gold buyers in India are holding their breath, to see if the government comes through on promises to ease severe gold import restrictions that have seen domestic gold prices spike so high, that heroin smugglers are giving up their trade and switching to gold smuggling for the higher profits. If gold restrictions are lifted, expect a surge in physical gold demand.
As the month of April moves along, gold demand should start picking up from the traditionally slow month of March. This year, March saw a great amount of safe haven demand over the Ukraine/Crimea crisis, which overrode the normal market pattern. With NATO and Moscow still trading insults, Putin may be dissuaded from trying to conquer more Ukrainian territory. Or he may not. This will percolate in the back of many people's minds as we go forward.