Gold starts the week at a 5-session high after finding support on Friday at the 1260.00 level in the wake of September’s negative nonfarm payrolls print. Heightened geopolitical tensions are also providing support to the yellow metal.
St. Louis Fed President James Bullard called the negative NFP number “startling” and said more data were needed before committing to a December rate hike. Nonetheless, Fed funds futures continue to suggest the probability of a rate hike is all-but a sure thing.
There will be quite a bit of FedSpeak again this week. We’ll see if anyone else is troubled by the deterioration in the labor market. As noted in commentary on Friday, the trend in payrolls rolled over long before this hurricane season.
Geopolitical tensions are on the rise again amid expectations of an impending North Korean missile tests. The UK is reportedly developing a war plan as such a test may result in a U.S. military response.
The Treasury market and the Fed are closed today for Columbus Day. However, Chinese investors are back in the mix after the long Golden Week/National Day holidays.