The monthly jobs report for August was released on Friday and the numbers did not meet expectations. ADP predicted 180,000 jobs added, but the report showed only 169,000. In addition, the report also showed a revision to July’s numbers, lowering the figure from 162,000 to 104,000 jobs added. This news proved to be a positive sign for gold investors as the price jumped back up over $1,390 an ounce.
Next, investors will be waiting to see if these low numbers are enough to make the Federal Reserve delay their tapering of their billion-dollar bond-buying program. Gold prices remained volatile the last couple of weeks as the Fed hinted at a reduction of the stimulus program, so any sign that it may continue will only be good news for gold.
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The Federal Reserve staying the course and potentially easing back on the bond-buying program, possibly as early as September 18th, is not necessarily a bad thing for gold. Initially the price could take a hit, but the potential for extreme inflation in the near future makes gold a strong long-term buy.
Despite some international pressure to avoid intervening in Syria, the United States is standing firm with its vow to take military action due to evidence that the Syrian government used chemical weapons. Meanwhile, Russian President Vladimir Putin has publicly stated that his country would help Syria should it come under attack by international forces. All of this uncertainty should be a big concern for stock market investors, leading many of them to hedge with physical gold and precious metals.
Gold is currently trading at $1,386.20 an ounce as of 12:30PM EST on Monday, September 9, 2013.