Last Friday was pretty eventful as the world saw two completely contrasting drama on the same stage in the USA. For the first time Gold had touched the higher notch while the unemployment report suggested the steepest surge in the unemployment rate.
Gold went up by almost 3% which is the highest since last week because investors are now choosing safer investment options like the yellow metal. Lack of jobs has been viewed as a path back to recession by the world’s largest economy whereby we see upsurge in gold prices and insufficient job creation.
Certain reports also suggested that there could be a possibility of more stimuli from the Fed and this rise in demand for gold and gold elf’s is attributed to the infused liquidity into the system by the stimulus already received. At around 3:30 pm spot gold stood at $57.25 while per ounce price was $1881.69. The highest the yellow metal reached was $1,911.46 on August 23. US growth in employment came to a standstill in August because of the falling confidence of the investors and business houses from hiring.
The unemployment rate as last reported was at 9.1% while job creation rate fell by 58000 jobs in July when compared with June. Apart from gold, US Treasury securities are in high demand because more and ore people are choosing safer investments over high returns.
Bell the Bull anticipates: The trend to continue unless the liquidity shows some effects on the monetary side rather than reducing investor confidence.