Gold & Silver Defy ‘Awesome’ NFP

What a turbulent old night on Friday night….  After the worst US NFP jobs report in 6 years last month, the June report exceeded all expectations with a print of 287,000 new jobs.  To make May all the more remarkable, that already awful 38,000 was revised down to just 11,000 new jobs in a population of 320m...  Such a strong June number should have everyone rejoicing that everything is awesome again.  However the cautious/sceptical theme of 2016 continues so whilst, indeed, shares rallied with the S&P500 nearing all time highs, we saw the financial anomaly of gold and bonds rallying in the same session.  After gold was rather suspiciously smacked down BEFORE the data was released it rallied straight back.  Likewise bonds hit all time low yields (high bond price).  Check out the price action of gold on the night (and silver was the same)…. Note the simply enormous amount offloaded instantly (you know, as you do when you want to maximise profit… not.)


The reaction on the night could be for a couple of reasons.  Firstly the NFP (non farm payrolls) number always comes out with the Establishment and Household Surveys.  Normally the two are fairly consistent.  This month however we saw a much much weaker Household survey with only 37,000 new jobs added and the number of unemployed jumping 347,000 to 7.78 million.  Behind the headline number in the Establishment survey showed weakness too with a very large proportion in the minimum wage category and hence only 0.1% increase in average hourly earnings.  Maybe headline readers buy shares and critical thinkers buy gold and bonds?

Secondly, the very suspicious (orchestrated?) price smash down before the data release presented a great buying opportunity for those seeing it for what it was, and in they jumped.  For those who follow the commercial bank manipulation theory, the response was yet another of recent trends showing they may well have lost control and there may now be no stopping gold and silver on their ascent.