{"id":60545,"date":"2012-09-10T10:30:54","date_gmt":"2012-09-10T00:30:54","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/09\/10\/gold-jumps-on-dismal-us-jobs-data\/"},"modified":"2012-09-10T10:30:54","modified_gmt":"2012-09-10T00:30:54","slug":"gold-jumps-on-dismal-us-jobs-data","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/09\/10\/gold-jumps-on-dismal-us-jobs-data\/","title":{"rendered":"Gold Jumps On Dismal US Jobs Data"},"content":{"rendered":"<p>\n\tBy Michael <span class=\"scayt-misspell\">Boutros<\/span>, Currency Strategist, <span class=\"scayt-misspell\">FXCM<\/span><\/p>\n<p>\n\tGold Advances To 6-Month Highs As Dismal <span class=\"scayt-misspell\">NFPs<\/span> Stoke <span class=\"scayt-misspell\">QE3<\/span> Bets<\/p>\n<p>\n\t<img decoding=\"async\" alt=\"\" src=\"http:\/\/www.fnarena.com\/ckfinder\/userfiles\/images\/dailyfx10-9.jpg\" style=\"width: 700px;height: 372px\" \/><\/p>\n<p>\n\t<strong>Gold Advances to 6-Month Highs as Dismal <span class=\"scayt-misspell\">NFPs<\/span> Stoke <span class=\"scayt-misspell\">QE3<\/span> Bets<\/strong><\/p>\n<p>\n\t<strong>Fundamental Forecast for Gold: Bullish<\/strong><\/p>\n<ul>\n<li>\n\t\t<u><strong>Commodities Look to <span class=\"scayt-misspell\">ECB<\/span> Rate Decision to Yield Direction Cues<\/strong><\/u><br \/>\n\t\t&nbsp;<\/li>\n<li>\n\t\t<u><strong>S&amp;P 500, US Dollar at Familiar Levels as Gold Breaks Out Higher<\/strong><\/u><br \/>\n\t\t&nbsp;<\/li>\n<li>\n\t\t<u><strong>Gold Takes Queue on Fed While Risk Trends Respond to <span class=\"scayt-misspell\">ECB<\/span><\/strong><\/u><\/li>\n<\/ul>\n<p>\n\tGold pushed higher this week with the precious metal gaining more than 2.6% to trade at $1736 at the close of trade in New York on Friday. The advance which started in mid-August has continued to gather pace with bullion hitting its highest level since late February and although our bias remains weighted to the topside, the <span class=\"scayt-misspell\">technicals<\/span> continue to suggest that the metal may be over-extended at these levels with a correction of magnitude likely in the days ahead. The downside is likely to remain limited however ahead of key event risk next week with all eyes now turning to the <span class=\"scayt-misspell\">FOMC<\/span> interest rate decision on September <span class=\"scayt-misspell\">13th<\/span>.<\/p>\n<p>\n\tThe US non-farm payroll report on Friday further fueled the advance in gold after the report grossly missed estimates with a print of just <span class=\"scayt-misspell\">96K<\/span> for the month of August. Although the unemployment rate fell to 8.1% from 8.3%, a deeper look at the data shows the size of the labor force continuing to contract with the participation rate falling to 63.5, marking the weakest participation since September of 1981 and further skewing the unemployment rate to the downside. When considering the continued deterioration in the size of the labor force (which has been steadily declining since the 2007 highs), Fed policy makers have become increasingly concerned that the natural rate of unemployment may exceed 7% from its historic 5.5%-6%. Manufacturing jobs also showed further signs of stress with the sector shedding <span class=\"scayt-misspell\">15K<\/span> jobs last month, missing calls for the addition of <span class=\"scayt-misspell\">10K<\/span>. Friday&rsquo;s labor report is likely to add further pressure on the central banks to embark on another round of easing as the domestic employment picture grows increasingly bleak.<\/p>\n<p>\n\tLooking ahead to next week, the <span class=\"scayt-misspell\">FOMC<\/span> interest rate decision takes center stage as investors weigh the prospects for monetary policy. At last week&rsquo;s Economic Policy Symposium at Jackson Hole, Federal Reserve Chairman Ben Bernanke vowed that the central bank would act &lsquo;forceful in supporting a sustainable recovery&rsquo; with the chairman speaking at length in defense of the Fed&rsquo;s actions to date in response to the global crisis. As such, it&rsquo;s likely that the Fed may look to announce further steps to stimulate the ailed jobs market in light of Friday&rsquo;s report with Goldman Sachs factoring in the probability of <span class=\"scayt-misspell\">QE3<\/span> at more than 50% at the September 12-13 <span class=\"scayt-misspell\">FOMC<\/span> meeting. However there is still plenty of speculation regarding what form of QE may be announced with many calling for the Fed to extended its &lsquo;late 2014&rsquo; language to mid-2015 or beyond. Although it is not our view that such actions are warranted at these levels (with the S&amp;P hitting its highest levels since January 2008 and NASDAQ at highs not seen since December 2000), it&rsquo;s likely that gold prices will remain well supported as investors begin to price in a higher likelihood of additional dollar diluting easing measures from the central bank.<\/p>\n<p>\n\tFrom a technical standpoint, gold remains poised for further gains in the medium-to-long term with this week&rsquo;s advance taking the precious metal to our objective cited last week at the 100% Fibonacci extension taken from the August <span class=\"scayt-misspell\">2nd<\/span> and <span class=\"scayt-misspell\">31st<\/span> lows at $1739. While broader metrics do suggest further advances in the weeks ahead, a near-term correction is extremely likely as daily <span class=\"scayt-misspell\">RSI<\/span> hits extremes not seen since August of 2011 (just before hitting all-time highs at $1921). Daily interim support now rests with the 61.8% extension at $1704 and is backed by $1692 and the former May high at $1671. A break above the $1739 threshold exposes subsequent resistance targets at the 123.6% extension at $1762 and the 161.8% extension just shy of the $1800- mark. Again we note the likelihood of a pullback of magnitude here with dips in gold offering favorable long entries. -MB<\/p>\n<p>\n\tThe views expressed are not <span class=\"scayt-misspell\">FNArena&#039;s<\/span> (see our disclaimer).<\/p>\n<p>\n\tFor real time news and analysis, please visit http:\/\/www.dailyfx.com\/real_time_news<\/p>\n<p>\n\t<span class=\"scayt-misspell\">DailyFX<\/span> provides <span class=\"scayt-misspell\">forex<\/span> news on the economic reports and political events that influence the currency market. Learn currency trading with a free practice account and charts from <span class=\"scayt-misspell\">FXCM<\/span>.<\/p>\n<p>\n\twww.dailyfx.com<\/p>\n<p>\n\t<em><strong>Disclaimer<\/strong><\/em><\/p>\n<p>\n\t<em><u><span class=\"scayt-misspell\">Forex<\/span> Capital Markets is headquartered at Financial Square 32 Old Slip, <span class=\"scayt-misspell\">10th<\/span> Floor, New York, NY 10005 USA.<\/u><\/em><\/p>\n<p>\n\t<em>Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before you decide to trade the foreign exchange products offered by <span class=\"scayt-misspell\">Forex<\/span> Capital Markets, LLC, <span class=\"scayt-misspell\">Forex<\/span> Capital Markets Limited, inclusive of all EU branches, <span class=\"scayt-misspell\">FXCM<\/span> Asia Limited, or <span class=\"scayt-misspell\">FXCM<\/span> Australia Limited, any affiliates of aforementioned firms, or other firms under the <span class=\"scayt-misspell\">FXCM<\/span> group of companies [collectively <span class=\"scayt-misspell\"><span class=\"scayt-misspell\">&ldquo;<span class=\"scayt-misspell\">FXCM<\/span><\/span><\/span> Group&rdquo;] you should carefully consider your objectives, financial situation, needs and level of experience. If you decide to trade foreign exchange products offered by <span class=\"scayt-misspell\">FXCM<\/span> Australia Limited you must read and understand the Financial Services Guide and the Product Disclosure Statement. <span class=\"scayt-misspell\">FXCM<\/span> Group may provide general market information and commentary which is not intended to be investment advice and the content of this email must not be construed as personal advice. By trading, you could sustain a total loss of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading in foreign exchange products. Foreign exchange products are only suitable for those customers who fully understand the market risk. <span class=\"scayt-misspell\">FXCM<\/span> recommends you seek advice from a separate financial advisor.<\/em><\/p>\n<p>\n\t<em><span class=\"scayt-misspell\">FXCM<\/span> Group assumes no liability for errors, inaccuracies or omissions in these materials and does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. <span class=\"scayt-misspell\">FXCM<\/span> Group shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. This email is not a solicitation to buy or sell currency. All information contained in this e-mail is strictly confidential and is only intended for use by the recipient. All e-mail sent to or from this address will be received by the <span class=\"scayt-misspell\">FXCM<\/span> corporate e-mail system and is subject to archival and review by someone other than the recipient.&rdquo;<\/em><\/p>\n<p>\n\t<strong>Technical limitations<\/strong><\/p>\n<p>\n\t<strong><span style=\"font-style: italic\">If you are reading this story through a third party distribution channel and you cannot see charts included<\/span>, we <span class=\"scayt-misspell\">apologise<\/span>, but technical limitations are to blame.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Market analysts at FXCM note gold has moved to 6-months highs and while a short-term correction is likely the metal appears poised for further gains in the medium to long-term.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[22],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60545"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=60545"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60545\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=60545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=60545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=60545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}