TD Securities Head of Global Strategy Bart Melek expresses his afterthoughts on the US Nonfarm payrolls statistics and its affect on gold price.
“Gold rallied no matter the US economic system including an surprising 531,000 positions and the unemployment price shedding to 4.6% in October.”
“The motive for that used to be the unchanged participation rate, which remained at 61.6%.”
“That in reality potential that the labor pressure participation is nonetheless at problematically low levels, and we are nowhere close to full employment.”
“This is why markets are no longer pricing in the chance of Fed’s tightening as imminent. Plus, it is dubious that the sturdy job increase tempo will proceed for the subsequent six months or a year.”
“With the Fed’s really dovish tapering announcement and the jobs facts in mind, the predicted June fee hike is no longer searching very likely.”
“The Fed will hold financial coverage quite handy for a extended duration due to the fact we are now not close to full employment. Fed’s view is that maintaining the financial system warm will in the end set off the absorption of greater human beings into the labor force. They want to reverse these mass resignations.”