Bullion trading in Asia remained confined within a fairly tight range of from $900 to $909 overnight amid slowing Indian demand above the round figure and some support from anticipatory speculative buying ahead of today's US nonfarm payroll numbers.
The US dollar headed towards a potential breach of the 72 level on the index while crude oil added just over $1 to $104.92 per barrel. There were apprehensions among some economists that the US may have vaporized as many as 150,000 jobs last month and that such losses could finally affix the R label to the economy in an official sort of way. Original projections called for a jobs loss figure of around 60,000 positions.
New York spot prices opened on the plus side, with gold gaining $2.00 at $905.30 ten minutes ahead of the data release. Participants will weigh the odds of an end of April Fed rate cuts against the demand contraction implications of a US economy with its reverse thrusters engaged. For the moment, the tilt is towards the speculative buying that the emphasis on the former might give bullion players. Tests to higher levels ($910 up to $935) should be expected in the wake of today's statistical picture, but it remains to be seen how many will also use such a opportunity to unload the metal at a profit. Silver added 6 cents opening at $17.39 while the noble metals rose slightly, with platinum gaining $7 to $1993 and palladium rising $2 to $441 per ounce respectively.
The jobs figure showed 80,000 jobs lost, which was higher than the expected level and pushed unemployment to 5.1% and also confirmed Ben Bernanke's pessimistic tone during congressional testimony earlier this week. The US dollar promptly broke under 72 in the index, while gold picked up an immediate $5 to $908.50 per ounce. The recession bell has now been rung without a doubt. All that remains to be seen is how brief and/or how shallow the contraction will end up being and what measures the central bank may take to ease the pain. We are told that the Fed has more tools in its bag of tricks in addition to the probable quarter point cut it might offer next.
We will leave it here for now, and will return with more in-depth updates and additional topics once the markets establish a clearer trend later in the day.