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Comex Gold Sees Choppy Trading, then Extends Early Losses Following Slightly Weaker-than-Expected U.S. Jobs Data

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By Jim Wyckoff

Comex gold futures initially pared their moderate losses in the immediate aftermath of a U.S. employment report that saw the key non-farm payrolls component come in slightly lower than expected. June payrolls rose by a lukewarm 80,000, while the market place was expecting a gain of around 95,000 jobs. Gold prices then retreated to near pre-jobs-report levels and then extended those losses in choppy and volatile trading. The U.S. dollar index firmed on the jobs news, while crude oil futures sold off further. These two “outside markets” are having a bearish impact on the precious metals Friday morning. The gold market bulls should feel a bit encouraged by the weaker jobs report, as it suggests the U.S. Federal Reserve will be more inclined to provide additional monetary easing—nicknamed QE3. Such would likely be at least initially bullish for the raw commodity markets, including the precious metals, due to the inflationary implications. Look for more choppy and volatile trading as the market place continues to digest the employment report and also begins to look ahead to next week’s fundamental events. August gold last traded down $24.00 at $1,585.00.