Seeking Alpha

Reversal: Gold shoots higher following jobs number

  • Gold's struggled for the last couple of months, but is still well ahead of equities for the year. The move, however, has yet to attract money into gold ETFs - one of the favored vehicles for trend-chasing goldbugs. The SPDR Gold Trust (GLD) has shed more than $450M in assets YTD, and competitor iShares Gold Trust (IAU) has brought in a tiny $79M.
  • "There hasn’t been much interest or optimism in actually owning gold ETFs," says Ned Davis' Neil Leeson.
  • In more immediate news, gold (along with Treasurys) has staged an impressive reversal today, piercing through $1,300 per ounce after dipping to $1,275 in the moments following the strong jobs number this morning. GLD and IAU each up 1.1%
  • ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GLL, DZZ, UGLD, GLDI, DGL, DGZ, DGLD, AGOL, TBAR, UBG, GYEN, GLDE, GEUR, GLDS, GGBP, GLDL
From other sites
Comments (21)
  • Doug Eberhardt
    , contributor
    Comments (2920) | Send Message
     
    "one of the favored vehicles for trend-chasing goldbugs."

     

    I hardly think goldbugs are trend chasers with GLD, lol.
    2 May, 03:15 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1045) | Send Message
     
    This has nothing to do with the jobs number. Strong jobs numbers are usually bearish for gold, because (a) they indicate the possibility that the fed might limit the expansion of the money supply and (b) they tend to make stocks and bonds more desirable investments in comparison to gold.

     

    And in fact if you actually look at the charts gold dipped pretty sharply right at 8:30 this morning as the jobs number was released.

     

    Gold went up later today because of the news from the Ukraine, obviously.
    2 May, 03:16 PM Reply Like
  • John Leszar
    , contributor
    Comments (70) | Send Message
     
    Strong job numbers?
    The labor force participation rate fell by 0.4 percentage point to 62.8 percent in April. The amount of Americans not in the labor force in April rose to 92,594,000, almost 1 million more than the previous month.
    
    The sharp drop in unemployment numbers, though, occurred because the number of people working or seeking work fell. The Bureau of Labor Statistics does not count people not looking for a job as unemployed.
    2 May, 07:28 PM Reply Like
  • arihalli
    , contributor
    Comments (54) | Send Message
     
    Phil. I certainly agree that the jobs number had nothing to do with golds increase today.
    I was inclined to believe, rather than Ukraine (which seems to trigger a rise in gold) it was the FACTORY ORDERS# at 10am, that reversed gold today. It was a poor number and perhaps was a signal that a reversal in QE might NOT be a good idea for Yellens Fed at this point.
    Perhaps you are right. I dunno.
    There have been SO many bad numbers (indicators) coming out in the past weeks that i would have thought that Yellen would have INCREASED QE -- not decreased it. And that gold might be lifted by those numbers. But, inexplicably, (to me anyways) it wasn't to be.
    I also used PSLV/PHYS not GLD as insurance. I agree Mr. Eberhardt.
    2 May, 03:30 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2816) | Send Message
     
    GLD closed up 1.22, which is .99%. Hardly a "shoot"
    2 May, 04:00 PM Reply Like
  • ziggysdad
    , contributor
    Comments (41) | Send Message
     
    It will be fun to watch Gold on Saturday. Bet it goes up!
    2 May, 04:07 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2920) | Send Message
     
    Best comment of the day ziggy!
    2 May, 04:21 PM Reply Like
  • alterami
    , contributor
    Comments (92) | Send Message
     
    Gold and Silver have really been playing the opposite of stocks lately. Good way to balance your portfolio.
    2 May, 04:32 PM Reply Like
  • fred1724
    , contributor
    Comments (67) | Send Message
     
    Agree.
    2 May, 06:02 PM Reply Like
  • T-time
    , contributor
    Comments (274) | Send Message
     
    So when stocks go up and your gold and silver go down, or vice versa, I suppose your portfolio is indeed balanced - all the way to "zero gain"... ?? One good stock performing at 20% and a bad one performing at -20% (portfolio 'balance') is like having your money in the bank! No pain no gain.
    4 May, 07:22 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4198) | Send Message
     
    The jobs report was, plain and simple, untrustworthy and not at all indicative of an economy gradually improving after a poor winter. Anybody who sold gold based upon the headline of that report was soon kicking themselves. The household survey did not corroborate the 42% better m-o-m job number, instead it contradicted it. We lost almost as many part time jobs as the headline claims we gained. In the absence of government incentives for such a shift, such a thing cannot happen. It did not happen. Other detailed numbers were equally at odds with the headline.
    2 May, 07:38 PM Reply Like
  • CoinsK
    , contributor
    Comments (3355) | Send Message
     
    1 out of 5 people that want to work can't find a job that allows them to be gainfully employed. The problem with a number like 6.3 % Unemployment is that you have to either be a moron ,(An Obama supporter), or to be someone unable to do simple math to believe such a ridiculous report .Or.... just not care about what it means to have a real job. The so-called "Jobless recovery" is a sham from the sham-meisters in Wash. D.C. It's the equivalent of lifting a bucket over your head while standing in it. It doesn't happen. No jobs ,no taxes, no recovery.
    2 May, 09:16 PM Reply Like
  • King Rat
    , contributor
    Comments (712) | Send Message
     
    From what I gather, the BLS unemployment rate is from a separate survey than the BLS job count. Both are naturally unrelated to ADP's survey.
    The lack of congruence merely demonstrates the inaccuracy inherent in collecting data. Combine that with housing data and you have some surveys seasonalized and some not seasonalized. It is a mess. It always has been. It does give a vague idea of the state of the economy though. Very vague.

     

    Untrustworthy as you say, yes, but not due to intention, merely poor data collecting strategies.
    3 May, 06:26 AM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2816) | Send Message
     
    Maybe those 1 out of 5 people are under qualified.

     

    Our best friend is upset because his daughter can't get a job as a public school teacher with a district having declining enrollments. The lady refuses to re-locate to a place where they need teachers. Her husband is upset because after going to junior college he can't find a job as a paramedic in his town.

     

    Meanwhile, anyone with a decent background in areas actually in demand- engineering, medical care, hi tech-and willing to re-locate, can find a wide assortment of good jobs, no problemo.
    4 May, 07:52 PM Reply Like
  • CoinsK
    , contributor
    Comments (3355) | Send Message
     
    PDR,
    Can they afford to have that job in a higher cost of living area ? Maybe they are over qualified and can't get paid what they should because some kid that owes so much in student loans will work for less .That's more realistic. It is happening nation wide. You should look into it more. My theme of not being gainfully employed stands.
    4 May, 08:13 PM Reply Like
  • james.
    , contributor
    Comments (298) | Send Message
     
    Gold was down several dollars this morning in reaction to this month's Jobs Report showing 288,000 new Jobs added in April compared to the expected number of 220,000, but then President Putin demanded an Emergency UN Security Council Meeting, at which point Gold and Silver rocketed much higher; Gold moved up to $1306, and closed at $1300 up $16, while Silver rocketed up to close at $19.52 up by 2.5% . The Russian Federation UN Representative at that Emergency Security Council meeting accused Kiev of illegal acts of its Military inflicting brutality against its own Russian-speaking citizens, despite President Putin's warnings against doing that. Subsequent to today's UN Emergency Security Council Meeting, Putin declared that Kiev has now invalidated the recent Geneva Peace Agreement.
    Gold price is now forming the right shoulder of the very bullish Reverse Head & Shoulders Pattern, with a Neckline at $1410 , which when sawed off, will give a 1st Price Objective of $1630 per oz. Gold has formed a Triple-Bottom here at the bottom of the Right Shoulder, and provides a great launching platform to blast through $1410. Using Software to obtain P&F Chart Price Objectives, they are as follows: GLD = $169 which is equivalent to $1760 per oz, SLV = $26 , HL = $5.97 , NEM = $38 . Gold is now climbing up its 3rd Leg Super Cycle which will carry Gold to $2700 per oz circa June 2015, and after a small pullback, will continue still higher towards Peter Shiff's Target of $5000. As is well known, the Double-Bottom at $1186 in Dec 2013 did CONCLUDE the normal 50% correction on Semilog Paper of the 2nd Leg Gold Super Cycle which saw GLD move from $69 up to $185 (the Geometric Mean of $113.5 is the 50% pullback on Semilog Paper, and so the GLD Double Bottom at $115 when Gold price = $1186 per oz is a very strong test of the $113.5) ! 5-2-14 at 4:40 pm PDT.
    2 May, 07:41 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4198) | Send Message
     
    The bullish pattern identified by James just happens to also coincide with the end of the seasonally weak months for gold demand. This month we should see an uptick in Indian demand as their gift giving season gets under way. Meanwhile, the stock market is entering its seasonally weak half of the year. The inverse correlation between stocks and gold should become quite apparent over the next several months.
    2 May, 07:52 PM Reply Like
  • jsIRA
    , contributor
    Comments (2601) | Send Message
     
    I don't think that gold price will raise to that high. But near term trend is bullish as it successfully defend its third bottom and breaks out third local top.

     

    Chart pattern: triple top break out.

     

    I always put few gold miner stocks in my Portfolio as hedge. It worked for the first three months this year and bought them back on their way down. Today's break out may indicate the start of this year's second round of run.

     

    We will be able to find it out next week.
    3 May, 02:24 AM Reply Like
  • T-time
    , contributor
    Comments (274) | Send Message
     
    I hope you are right James. On the other hand there are still those claiming a 700 dollar gold bottom with similar degree of technical analysis that you provide here (both of which are over my head to be honest)- Seems we've always been told that for stocks, past performance is no indication of future price, but for commodities, there do seem to be certain historical trends. It just seems there is a lot of moving parts... did these models predict the drop from 1900 to 1100 from 2012 / 2013?

     

    Meanwhile, I am with you on this and do feel gold and silver going up! Gold at 2700 around this time next year would be fantastic - guess I'll hang on to those old coins a bit longer!!
    4 May, 07:30 PM Reply Like
  • T-time
    , contributor
    Comments (274) | Send Message
     
    With the exception of gold mining stocks I suppose - most of these typically follow gold price - especially the streaming / royalty stocks....
    4 May, 07:33 PM Reply Like
  • rubber duck
    , contributor
    Comments (194) | Send Message
     
    People working multiple part time jobs will positively reflect in the bean counting, but won't contribute much to economic growth, which is what we've been seeing.
    2 May, 10:33 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector