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Gold Price Edges Higher On Jobs Report
Posted May 2nd, 2014
Los Angeles CA, May 2 (Tangible Investments) - by James O’Dell - Gold and silver prices rebounded in overnight trade on bargain hunting and short covering after retreating on Thursday as the gold price dipped $6.50 or 0.50 percent to close at $1,284.20 an ounce in thin trade following theannouncement of further cuts to the central bank's massive quantitative easing (QE) program on Wednesday.
According to noted economist, Robert Wiedemer, it remains to be seen whether the Fed can continue to scale back its bond buying program in the wake of a stalled first quarter. The price of Silver slid $0.14 or 0.73 percent to close at $19.01 an ounce, as the gold/silver ratio reached 67.55, the widest disparity in 3 1/2 years, and it's making physical silver very attractive to longer term investors.
Physical gold has also been very popular over the past several weeks as evidenced by the fact that the GoFo rate, the Gold Forward Rate, has turned negative, and not just for a day or two, but for an extended period and it suggests panic buying is taking place in physical gold. The U.S. Mint reports that April gold bullion coin sales totaled 56,000 ounces, and that is up 70 percent from the 33,000 ounces sold in March.
The U.S. Labor Department has just released the key nonfarm payrolls report and it shows a better than expected 288,000 jobs were created in April. The Labor Department also reported a surprising 6.3 percent unemployment rate, far below the March reading of 6.7 percent. There was, however, a significant drop in the participation rate which fell to 62.8 percent from a March reading of 63.2 percent.
The sharp contraction in the participation rate shows that more people have given up looking for a job and have left the labor force altogether. "It actually would have risen if not for the plunge in the participation rate," said Adam Button, of Forexlive.com. The gold price edged higher to $1,284.90 an ounce after the release of the report.
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