12:00pm EST Friday 2/6/14
Gold is slumping after a stronger-than-expected U.S. jobs report prompted investors to turn their attention toward growth-sensitive investments like stocks.
Gold is presently down $33, or nearly 3%, at $1,232 a troy. Silver is down $0.58 to $16.68 or 3.5%.
U.S. nonfarm payrolls grew by a seasonally adjusted 257,000 jobs January, beating the 237,000 increase economists predicted. The report also raised past estimates of jobs creation for November and December by a combined 147,000.
Gold prices are falling as investors are recalibrating their view of U.S. economic health in view of the new employment data.
“People are embracing the fact that the U.S. is continuing to grow and there’s no more flight-to-quality assets needed,” said Adam Klopfenstein, with Archer Financial Services in Chicago.
Many investors view gold as a way to protect wealth during times of uncertainty. During periods of economic expansion, they frequently sell gold and buy equities.
A stronger economy also clears the path for the Federal Reserve to raise interest rates, a policy shift widely expected to occur in the second half of 2015.
“People are now saying that maybe the Fed will move in June, which is sooner than a lot of people expected,” Mr. Klopfenstein said.
All Things Considered – John’s Commentary:
Take advantage of the dips! Add in modest amounts. I will be replenishing inventory today at these levels.
“The history of paper money is an account of abuse, mismanagement, and financial disaster.” – Richard M. Ebeling
