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Was The NFP Report A ‘Blip’?

ByThe Real Asset Company
AuthorJan Skoyles
Published 01/16/2014, 12:13 PM
Updated 05/14/2017, 06:45 AM

Gold slipped yesterday as the US dollar index and world stock indexes climbed. Both act as alternative asset classes for the precious metal. The Empire State’s manufacturing survey was better-than-expected, adding to the positive sentiment that followed the US retail sales data the day before.

Added to this the Fed’s Beige Book, released yesterday, which indicated underlying improvement in the US economy. Housing, manufacturing and retail appeared broadly positive whilst nine districts reported moderate growth.

There seems to be a growing feeling amongst analysts that the dismal December Non-Farm Payrolls data was a mere ‘blip’ given the slurry of positive data which has been released this week.

Platinum has failed to react to positive data on the European car market which showed the highest year-on-year gain in December, for four years.

Today there are some key figures due to be released that may cause some volatility in the gold price. Market speculators will be paying attention to the weekly jobless claims numbers from the US, general consensus seems to be that it will be down slightly. CPI numbers from both the US and Eurozone are likely to be positive and high which will put some pressure on the gold price.

CIBC said yesterday that they expect long-term US real interest rates to return to 2.55, the 50-year average. This would be positive for the gold price in the long-term. In this type of environment, says the bank, historically gold makes 2% annual gains. They also point to the ‘potential positives’ which are being ignored by the market, such as strong physical demand and central bank buying.

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