Gold and Silver prices rose to a six month high early Thursday, in anticipation of the official ECB press conference announcing the initiative. Read more on ECB OMT at: ECB Launches Bond Buying Program. But Silver & Gold Prices backed down from the day’s highs on some stronger-than-expected U.S. economic data. Both Precious Metals pared their gains on news the U.S. ADP national employment report showed a stronger-than-expected rise of 201,000 in August. The combination of the U.S. jobs figures and the ECB’s downward growth revision helped the U.S. dollar recover from earlier weakness. Weekly jobless claims fell by 12,000 to 365,000 in the week ended Sept. 1, the fewest in a month. The median estimate of 48 economists surveyed by Bloomberg called for a drop to 370,000.
Companies added more workers than forecast in August, data from Roseland, New Jersey-based ADP Employer Service showed. Employment increased by 201,000, the biggest gain in five months. The median forecast of 41 economists surveyed by Bloomberg called for an advance of 140,000.
Stocks advanced on the jobs data and as European Central Bank President Mario Draghi said policy makers agreed to an unlimited bond-purchase program as they try to regain control of interest rates in the Eurozone. The Standard & Poor’s 500 Index climbed 1.1% to 1,419.37 at 9:40 a.m. in New York. The Consumer Comfort Index is based upon Americans’ ratings of the national economy, the buying climate and their own finances. The gauge was at minus 47.4 in the week ended Aug. 19, the lowest level since mid-January. The personal finances gauge dropped to minus 13.5 last week from minus 12.7. The number of consumers who say their budgets were in “poor” shape, the most negative rating, climbed to 23%, its highest since November.
The forecast for the key non-farm payrolls figure of the jobs report is 125,000 – 135,000 against the 163,000 number the previous month. Unemployment rate expected to hover around 8.3%. However, the strong ADP jobs figure Thursday has many wondering of the Friday jobs report will be stronger than forecast. There is heightened interest in today’s payrolls data because a weak jobs report would open the door wide for a fresh U.S. monetary stimulus announcement by the Federal Reserve at its FOMC meeting next week. Fresh massive US Monetary stimulus would be bullish for Gold, Silver and all Commodities in general. A number below 140,000 will send Gold higher towards $1729 to $1738 & on a US Fed’s stimulus confirmation, to at least the near term target of $1855. Any good employment number above 175,000 could send Gold sharply down to $1652 & then to a strong support near the $1603 – $1594 range also.
Consumer confidence in the U.S. was little changed last week, hovering near an eight-month low, as Americans struggled with rising gasoline prices and elevated unemployment. The Bloomberg Consumer Comfort Index was at minus 46.5 in the period ended Sept. 2 compared with minus 47.3 in the prior week. It was the fifth consecutive week the index has registered a reading lower than minus 40, a level typically associated with severe economic discontent.
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