The Daily Market Report: Gold Remains Range-Bound After Lackluster Jobs Report

08-May (USAGOLD) — Gold became a little choppy in the wake of this morning’s much anticipated nonfarm payrolls report. The yellow metal rose initially, then retreated and is presently trading several dollars higher on the day.

Nonfarm payrolls rose 223k in Apr, below expectations of +225k. March’s dismal +126k print was revised to an even more dismal +85k. Nonetheless, the jobless rate ticked lower to 5.4%.

Some analysts are taking solace in the fact that payrolls at least rebounded in April, but it’s hardly cause for celebration. The monthly average for job growth in 2015 is a soft 194k, down from an average of +260k in 2014.

This leave the Fed on hold. A June rate hike is even more off the table and the jobs data does nothing to bolster the prospects of ‘lift-off’ in September.

There’s nothing new on the Greece front, although they are probably one day closer to default. There continues to be statements of optimism, but my guess is that they’re just trying to forestall a market panic and a run on the banks in Greece.

Even if that last €7 bln tranche of the current bailout is released, it only buys Greece a limited amount of additional time. Another bailout will have to be negotiated, and I don’t see creditors as having much appetite for a continuation of this charade. At best they might hope to orchestrate some kind of orderly default.

A default may trigger a ‘Grexit’ from the eurozone, although that is not a foregone conclusion. Certainly, it will lead to some pretty significant market turmoil, that may result in a flight-to-safety trade that would benefit gold.

The stunning Conservative upset in the UK election creates an additional vulnerability in the EU. Polling had suggested the Tories were going to lose seats in the House of Commons. In reality, they achieved a majority which consolidates PM David Cameron power.

Cameron has pledged to hold an ‘in-out’ referendum on EU membership before the end of 2017. The term “Brexit” has already surfaced.

While Cameron is in favor of remaining in the EU, when such things are put in the hands of voters, one can never truly be sure of the outcome. This may result in some additional market uncertainty in the years ahead.