A positive number could boost gold as investors have less need to liquidate or prompt investors to forget about gold and buy stocks. A negative number could trigger a rush out of gold into cash or could support safe haven buying. And the third possibility is that markets will care more about Europe than the U.S. and gold will still be held hostage by euro-dollar currency fluctuations.
"I do think that job growth will come in reasonably well," says Oliver Pursche, co-portfolio manager of the GMG Defensive Beta Fund. "I don't think that we will see 100,000 like the ADP report but it should be a positive number and reinforcing our long standing view that there are improvements being made but they are very small and slow."
Pursche thinks that unless the payroll numbers falls to one extreme or another it is unlikely to really drive the gold market. The G20 meeting, the Greek situation and Italy and Spain are more in focus.
"I don't think you are going to see much movement. Gold prices have been driven by retail investors in the last 6 months ... I don't think we're at a point where there are any new fears that are driving significant assets into gold."Supporting Pursche's point is the SPDR Gold Shares (GLD), which hasn't shed any tons since last Tuesday and is standing firm at 1,243 tons. Gold mining stocks were higher Thursday. Agnico-Eagle (AEM - Get Report) was adding 3.91% to $50.52 while Eldorado Gold (EGO - Get Report) slipped 0.67% to $19.41 after delivering an in-line third quarter and lowering 2011 production guidance and raising cash cost estimates. On the flip side, Kinross Gold (KGC - Get Report) and Yamana Gold (AUY - Get Report) were up 0.9% and 5.58%, respectively, after both companies reported killer earnings Kinross made 24 cents a share in the third quarter and gold production was up 13% year over year. Cash costs rose to $634 from $517 a year earlier but margins were still up more than 50%. The company reaffirmed its 2011 gold production guidance of 2.6-2.7 million ounces. Yamana made 26 cents a share on gold production of 279,274 ounces, up 4% from a year ago. Cash costs were $94 an ounce, factoring in silver sales, up 62% from the same period last year. The company reaffirmed its 2011 production guidance of 1.04 - 1.14 million gold equivalent ounces, which should increase to 1.7 million by 2014. Yamana also raised its dividend by 11%. -- Written by Alix Steel in New York.
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