Equities Up Only Slightly On Job Data Worry As Gold Advances Strongly

In trading at 4 o’clock in New York, gold is sitting at $1261 per ounce. It is pulling the rest of the precious metals complex up, although it appears that raging palladium would do quite well if it went solo.

Palladium is up 4.00% on the day, having risen from its recent lows last week of approximately $485 to $537 today. It thus easily surpasses the high in February of roughly $520.

Gold is reacting to a wait-and-see mood that started falling over the equities trading crowd after some very good U.S. economic data and some puzzling data were released. What are they waiting for? Tomorrow’s employment data is due out from the Labor Department. You’ll recall that Wednesday ADP issued figures indicating private employment had jumped well more than expected.

We should remember that according to our recent technical models gold has now broken above its former resistance of 1243, which is now support.

The Dow and he S&P 500 have seesawed all day. At 3PM in New York, they are both up a about a quarter of a percent. The NASDAQ is up only marginally.

Crude oil is helping the Dow and S&P in the afternoon session. Although it’s not a mighty helping hand it is enough to keep the two indexes from swooning before the labor report.

Although the 10-year bond’s yield is off slightly, it’s not really an indication that there is strong haven demand for the paper.

Additionally, the U.S. dollar/yen pair shows the greenback stronger against the Japanese currency. That’s a further sign that haven demand is not figuring prominently in today’s trading. It is something else.

On the counterpoint, the euro rose against the dollar because of worries regarding the American labor market and what appeared to be a slip in service sector employment. The ISM said services hiring contracted to below 50 on their index.

It’s hard to reconcile their assessment of contraction and ADP’s expansion view, which told us something different on Wednesday.

We can only reiterate what we’ve said numerous times before about gold at this juncture. It is functioning only barely as a true haven. However, it is functioning as a growth instrument, strong enough on its own merits – meaning it is providing solid profits) – to warrant even more interest in buying into it when the time is right.

Some friends have asked us if all the turmoil in the Republican presidential nominating process is having much of an effect on markets.

We can give a roundabout answer. Turmoil is almost never good for traders. It creates sideways trading and a lot of tricky rapids that must be shot in order to continue down the river.

But if you pinned us down, we would say, “No.” It’s too early in the process. Indeed, there is something stirring in the land and eventually it well may be very influential on investments.

Wishing you as always, good trading,