Gold pushed to new highs for the year above 1326.00 in the wake of this morning’s nonfarm payrolls miss. The yellow metal subsequently retreated into the range, perhaps on profit taking ahead of the long holiday weekend, but dips are likely to be seen as buying opportunities.
U.S. nonfarm payrolls rose 156k in August, below expectations of +183k, versus a negative revised 189k rise in July (was +209k). The unemployment rate ticked up to 4.4%. Expectations were for steady at 4.3%.
Hourly earnings rose just 0.1%, below expectations of +0.2%, versus a negative revised +0.1% in July (was +0.3%). The average workweek ticked down to 34.4 hours, on expectations of 34.5 hours.
The weakness of these data further erode the likelihood of another rate hike this year. It may also give the Fed pause when it comes to beginning the balance sheet unwind, signaled to start as early as this month.
The dollar initially retreated, along with U.S. yields, providing a boost for gold. The dimmed prospects for tighter monetary policy are underpinning stocks. For that market, good news is good news and bad news is good news . . . until it isn’t . . .