Gold Prices have rallied sharply now to a six month high on a U.S. employment report for August after posting moderate losses on a corrective, profit-taking pullback as an after effect of yesterday’s stronger-than-expected ADP national employment report that showed a rise of 201,000 in August. Treasuries and Gold Prices surged, while the dollar slid, Commodity and financial shares climbed the most with the Standard & Poor’s 500 Index poised for its biggest two-day gain since July, amid bets on central bank stimulus as payrolls increased less than projected.
The highly anticipated U.S. Non-farm payrolls report for August came in weaker than expected posting a rise of 96,000, following a revised 141,000 rise in July that was smaller than initially estimated. The median estimate of 92 economists surveyed by Bloomberg called for a gain of 130,000. Unemployment unexpectedly fell to 8.1%, and hourly earnings were unchanged. A weak jobs report likely opens the door wide for a fresh U.S. Monetary Stimulus – QE3 announcement by the Federal Reserve at its next FOMC meeting. Fed Chairman Ben Bernanke had said last week he wouldn’t rule out the chances of more stimulus to bolster a job market he described as “a grave concern.’ The Federal Reserve’s Open Market Committee meets next week to discuss policy and will release a statement on Sept. 13 after a two-day meeting.
Comex Gold Prices jumped to $1742 from $1689 & Silver shot up to $33.75 from $32 today. MCX Gold Prices hit a new record high at Rs. 32,000 from Rs. 31,256 seen earlier in the day & MCX Silver shot up sharply to Rs.64,121 from Rs. 61,398. Sugar, Copper, Zinc and Silver jumped more than 2.6% for the biggest gains in the S&P GSCI Index of commodities. Copper gained 3.6% to $3.6430, the highest since May 14, as China approved plans to build 2,018 kilometers (1,254 miles) of roads and other infrastructure programs, spurring the nation’s biggest stock-market rally in almost eight months. The country is the biggest buyer of the metal.
Inspired by the peripheral news, China’s two stock markets continued the rally of yesterday, opened at high points each. On Saturday Sept. 9, several Chinese Economic Data releases like inflation data, industrial production, trade balance and retail sales are expected. China still has plenty of scope to take fiscal policy and monetary measures. Base Metals should therefore be able to continue their upswing in the coming weeks and months. The National Development and Reform Commission, the country’s top economic planner, unleash the signal to boost stable economic growth by accelerating approvals of over one trillion local-currency infrastructure projects within two days. Benefited from the spur, sectors of construction materials as well as mechanic equipments led the increase, with stocks of brokerage, insurers, coal, colored metals actively. China is most likely to see its annual growth at 8%, its slowest full-year of growth since 1999 & the slowest pace of growth for Q2 in more than 3 years. Chinese Economic growth has slipped for six successive quarters. The first hard data of the third quarter in China has led some analysts to question the strength of what was expected to be the start of a shallow rebound in the economy. Chinese economists have recommended the authorities to increase the volume of the World’s largest gold producer, China’s Gold Reserves six-fold. Read More in – China Economy demands Action. Urged to increase Gold Reserves. Analysts however said it does not mean that Beijing will start buying Gold Bars immediately but it is clear that China’s Gold Demand will rise significantly. China’s intention to significantly
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