After the United States FED published the scheduled jobs report, the disappointment was inevitable for most economist, analysts, and investors.
While this report made clear that the U.S. economy isn’t at its best, investors are losing faith in the Dollar at short-term.
Being worried about the future of the U.S. Dollar is unavoidable. The slow progression of the domestic economy, creating only 160,000 new jobs in April, was worrying for both investors and the FED. At the same time, unemployment didn’t change, located in 5%.
Experts at MarketWatch expected numbers to be way better in the report. A minimum of 205,000 jobs in nonfarm payrolls was forecasted by the media authority, considering this number already a pessimist one.
Impact on Gold
As usual, disappointing numbers in official reports about the U.S. economy boost gold prices. Investors often worry about the currency’s situation, which is weaker when people lose interest and economy are not doing well.
This Friday was excellent for the gold markets, receiving all the concerned players from Forex. The jobs report led a considerable amount of investors to look for a safe-haven asset that didn’t suffer under a Dollar debacle.
The numbers in the recent report may suggest that the FED will have problems to raise the interest rates in the future. In order to do so, the U.S. economy has to throw better results, instead of the actual ones.
Bank of America Merril Lynch stated through its technical team that, according to the recently published data, investors will not see interest rate raises anytime soon. FED had plans to raise the rates twice this year. Now, the panorama has changed.
This fact is helping gold to reach unexpected levels. George Gero, precious metals expert in RBC Wealth Management, said that is possible that gold “finally close over $1,300”.
RJO Futures senior market strategist Phillip Streible is confident that “the next bull market in gold is starting”. This may represent a huge opportunity for all-time, consistent gold holders.
Mining Stocks are Enjoying gains as well
The great Friday gold had was also positive for mining stocks. Big names in the market are now recovering from massive losses in the previous months.
A bearish gold market affected terribly the mining companies’ performance, pushing investors to look away to other, safer alternatives.
Single-day gains for mining stocks are notable. Newmont Mining and Barrick Gold went up almost 4%. On the other hand, Goldcorp got 2.9% by the end of the day.
Besides stocks, leveraged exchange-traded funds related to gold also recovered what they lost recently. The Direxion Daily Junior Gold Miners Index Bull 3X Shares gained 16% by the close. The Direxion Daily Gold Miners Index Bull 3X Shares when up 12% as well.
The Bottom Line
The bullish gold market is performing above expectation and against all the odds. By now, the prices of the precious metal achieved its best quarter in three decades. This new achievement for the financial indicator may be a good way to forecast what is coming.
Besides the negative forecasts, we heard months ago about the final age of the gold markets, including mining companies in the terrible scenario, prices are getting higher each day, proving the contrary.
The worldwide adversities in the financial matter are including now the slow progression of the U.S. economy. After decades of being the most solid currency available to invest in, people may be feeling worried about the direction of the Dollar.