Gold Circles, Looking for A Place to Land After Elections

Gold appears to be as tormented as the rest of us from the crazy ups and downs of the election. It is bouncing around like a baby on its mother’s lap. It’s been as high as 1291 per ounce and as low as 1272.

As the session heads toward close, gold is trading off about $5.00. However, silver is up 16¢ or 0.90%.

U.S. equities are up modestly, about one-half of a percent across the three major indexes with the NASDAQ coming on strongest. This is on the heels of at least a realization the election is all over but the shouting. While the market is showing some bias toward a Clinton presidency, it is really demonstrating what we all feel: we’re done with hearing about the election. (We hope.)

European equities were in concurrence, the major indexes rising between a quarter and half a percent. Though the Nikkei caught a small, small loss, the rest of Asia was up, also on optimism concerning the election.

Crude oil was up on settlement but has since given it up in afterhours trading. But the swing is negligible and West Texas Intermediate is reflecting the general market sentiment on election Day. Brent North Sea is down about 0.60%.

Also reflecting the flight from haven moves is the state of the currency markets. The U.S. dollar is up 0.65% against the yen, chief haven currency and up against another important haven, 0.35%.

Naturally the stronger dollar helped push precious metals down, accounting for about 40% of today’s decline.

It is hard to remain dispassionate during a campaign such as we have witnessed. But there is something crucial percolating underneath our current national experience and it should not be ignored.

There has been a lot of very unpleasant and repulsive static in the air during the campaign this year. We’ve had misogyny, racism, ethnic attacks, fear mongering, religious intolerance, harping on crime (which has been declining for two decades), and a host of other “big league” ugliness.

The heart of the matter, however, is the conflict between our industrial past and our post-industrial future. This is not a new conflict. It has precedents and no doubt will have descendants.

In fact, the changes in the broad U.S. economy, the relinquishment of our premiere manufacturing status, began the day we started in earnest to rebuild devastated countries and regions after World War II. It could not have ever been otherwise unless we had not undertaken that reconstruction.

Since then, we have lost tens of millions of jobs, not to international trade competition alone or even in majority, but to ever-advancing technology.

As a quick nod to the past and similar unsettling transitions, we have only to look at America around 1900. At the time, more than 40% of workers were engaged in agricultural labor. Today, about 2% of the population raises all our food (and a good deal of food for other countries). The manufacturing sector represents about 9% of the workforce.

We will see that percentage decline to about 7.5% according to economists. Yet, the value of what we produce has been steadily rising, even throughout the Great Recession. And now that we’re putting the recession behind us, the value of manufactured goods will grow even faster.

The rate of technological change will accelerate, too.

It’s easy enough to say that we are going to need more smart people to operate the smart machines. It’s true. But what will we do about simple jobs that will be lost to robotics? Driverless cars/trucks; cheaper and faster fast food prepared and delivered by machines; modular construction; and, jobs in banks, insurance and so forth that will rely on metric measurements that will drive computer functions.

What we will need is a consistent way to understand our needs, and get people trained and educated. Calling back yesterday’s jobs is not an alternative.

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Wishing you as always, good trading,