Gold fell more than $20 overnight, as fears the U.S. would start winding down its quantitative easing next month pervaded the market. Once gold edged past the $1,300 mark, sell stops were triggered, which quickly dropped the price under the $1,290 mark. This was caused by the better than expected GDP and manufacturing numbers Thursday, combined with expectations of good news in Friday's non-farm payroll report.
But a funny thing happened on the way to the gold apocalypse: Non-farm payrolls came in far below estimates, with only 162,000 jobs added, compared to an expected 184,000. Many of these new hires were in part-time, lower paying "McJobs", as shown by the wage numbers. Hourly earnings fell for the first time since October, and the number of hours worked per week by the average worker decreased as well.
The unemployment rate fell from 7.6% to 7.4%, against expectations of 7.5% Good news, right? Nope. The decrease in unemployment was caused mostly by a decrease in the labor pool, meaning thousands of people have given up looking for a job and are no longer official counted in unemployment numbers.
All this news hitting at the New York open had an immediate effect of hammering the dollar and boosting precious metals. Stocks opened lower, and oil also faded on prospects of lowered economic activity in China.
The Nikkei, which closed before the U.S. payroll report, rode the good American GDP and PMI numbers higher, to close at nearly 3.3% up on the day. Hong Kong stocks were up 0.5% for the best close in two months. Shanghai stocks were mostly flat.
In Europe, stocks also closed at a two-month high, up 0.2%.
Gold's recovery on the non-farm payroll data has it once again in that super-tight range we've seen in U.S. trading all week, as recent news has not been enough to provide the market with anything more than a momentary direction.