Market Report: The Empire Strikes Back

by Alasdair MacLeod
Gold Money

All was going swimmingly for gold and silver until yesterday (Thursday), when gold took a $37 hit and silver was thumped by 70 cents. Consequently, by morning trade in Europe today gold had lost $32 to $1870, and silver 54 cents to $27.38.

At the root of it was the increase above expectations in private sector payrolls, reported on Thursday by the ADP Research Institute. But given that massive labour shortages have been reported for the last month or two, this does not constitute news. But it is the effect that matters. Investors are reminded that tapering is likely (despite semi-official denials) and that perhaps interest rate increases are brought forward. Consequently, the stock market drifts off, the dollar’s trade weighted rises fifty basis points, and gold and silver prices are hit.

The reality is nothing new, but it is an excuse to deter buyers of gold and silver futures and to encourage panic among the bulls.

Continue Reading at…