Good news. The U.S. economy added 288,000 jobs. The unemployment rate is down to 6.1 percent.
Bad news. Gold is down $10 to $1,317.30.
What do these two bits of information make you think?
I am sure there are many who might conclude that good news for average people and the economy is bad news for gold.
That isn’t necessarily so, but those who do not follow both numbers closely, nevertheless still might think it is.
I understand the economic reasoning as a possible explanation for the move. If the U.S. economy is moving toward a more healthy state, interest rates will rise. Higher interest rates will depress interest in gold investment as happened most spectacularly in 1980.
But economic reasoning aside, I would rather think that low-volume pre-holiday trading has more to do with gold’s decline than any economic data.
While I would like to not be at my desk this morning, I know there are many others who work here who are absent and have already begun their 4th of July weekend.
Financial markets are nearly there as well. The stock market closes early today.
Since we are almost to the holiday, let’s just forget about today’s movements in the gold price. It will mean much more come Monday.