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Gold Reverses, Moves Up

Written by Gary North on January 6, 2012

Gold has reversed this week. Silver moved up with gold. Other commodities continued down.

The euro fell below $1.28, indicating that gold’s move is a currency-related phenomenon.

“The biggest influence today was the euro,” said Frank Lesh, a broker and futures analyst with FuturePath Trading in Chicago. “People fled the euro and bought gold.”

The euro slipped under $1.28 on Thursday as investors focused on concerns about euro zone banks and a French bound auction got a lukewarm reception.

There was good news from the jobs market.

Private-sector payrolls swelled in December, led by the services sector and small businesses, according to the employment report released Thursday by payrolls processing firm Automatic Data Processing Inc. Private payrolls gained 325,000, far outpacing growth in prior months.

This may be higher-than-normal because of Christmas sales. ADP is not a government agency. It gets data from the private sector. I trust its reports more than I trust the Bureau of Labor Statistics.

Meanwhile, “most metals futures bucked gold trend to trade lower on Thursday, with copper, platinum and palladium extending their losses from a day earlier even as they trimmed their decline as the day wore on.”

Gold can and does move independently from the other metals. It is in wider demand as an asset for personal financial protection.

The fact that it is above $1,600 again indicates support. People start buying. It falls sharply, then reverses.



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