Stable Gold Price Flouts Economic Indicators

The big news is in – the monthly jobs report from the U.S. Department of Labor, a sacrosanct economic indicator if ever there were one. The U.S. added 253,000 jobs in February, and the unemployment rate dropped to 4.7%.
 
No doubt about it. This is the kind of news professionals routinely exploit to forecast good tidings for the nation’s economic health. According to George Washington University economist Tara Sinclair, “It’s definitely a solid report.” In fact, she feels confident the Federal Reserve will use this report, among other news, to justify a rate increase when its Federal Open Market Committee (FOMC) convenes next week.
 
The U.S. job market underwent an upsurge in construction, health care services, manufacturing, and mining last month. And the U.S. Department of Labor added the creation of 9,000 jobs to the December, 2016 and January, 2017 numbers it had previously released.
 
We shouldn’t be surprised, then, that the stock market reacted accordingly. The S&P index SPX gained 5 points, the Dow Jones Industrial Average DJIA added 12 points, and the Nasdaq Composite Index COMP tacked on a whopping 18 points.
Gold Price Flouts
All told, though, gold has recovered to the tune of 7% since the presidential election. The yellow metal, then, is flouting the economic indicators that traditionally pave the way for its downward move. And, according to analyst Dominic Schnider of UBS Management in Hong Kong, the gold market has already priced in the expectation of rate increases.
 
The strength we’re now seeing in gold – its defiance of traditional fundamentals – has to do with investor uncertainty about what President Trump will do next. While he has predictably signed a slew of executive orders authorizing regulatory cutbacks, he’s also revised his plans on the fly for altering Obamacare. Also, Congress, including his Republican colleagues, are not readily going along with his plans for the economy.
 
Investor sentiment veers now toward the possibility that the stock market could correct on the dime. And as UBS’s Shnider reads the cards, a drop in the gold price below $1,200 could spark investor need for a safe haven. Up $4.00 today on the COMEX, the spot price of gold is $1,201, portentously close to Shnider’s suspected turnaround level. Also, it’s especially significant that long positions of hedge funds and money managers in COMEX gold have almost tripled this year.
 
Under the circumstances, private investors would be wise to temper their investments in paper assets with a solid position in physical gold. It’s fair to say that the political uncertainty that now dogs the stock market will be with us for at least four years. And you’d best be on your guard when it comes to protecting your retirement account.
 
Request more information now or call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

This entry was posted in Alternative Assets, Economy, Global, Gold, Inflation, Investor, IRA & 401-K Accounts, Money, Physical Gold, Precious Metals, Precious Metals News, Retirement, Stocks, Trump, US Dollar, World. Bookmark the permalink.

Comments are closed.