This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Plummets as Payrolls Jump (Update 1)

Updated from 10:35 a.m. ET with settlement prices

NEW YORK ( TheStreet) -- Gold prices tumbled on Friday after a strong June jobs report blemished the yellow metal's appeal as a safe-haven asset.

Gold for August delivery at the COMEX division of the New York Mercantile Exchange plummeted $39.20 to $1,212.70 an ounce. The gold price traded as high as $1,257.10 and as low as $1,206.90 an ounce, while the spot price was off $37.60.

"Good news for the economy is bad news for gold as interest rates jumped on the payroll news and bond yields jumped higher; all this makes strong stocks, strong dollar and weak metals," George Gero, precious metals strategist at RBC Capital Markets, wrote in a note.

The Bureau of Labor Statistics reported nonfarm payrolls rose by 195,000 in June, as the unemployment rate remained unchanged at 7.6%. Economists polled by Thomson Reuters anticipated non-farm payrolls to have added 165,000 jobs.

Silver prices for September delivery slid 96 cents to settle at $18.74 an ounce, while the U.S. dollar index was boosting 0.74%.

Gold has been trapped in bear territory since mid-April, when the price of an ounce plummeted about $200, or 13%, over two consecutive trading days. It was the largest two-day drop in 30 years for the precious metal.

Pillaging the value of the asset has been Federal Reserve language that the central bank may begin to taper its $85 billion a month in purchases of mortgage-backed securities and longer-term Treasuries, and improving economic data in housing, labor and consumer confidence, among others.

A spike in bond yields following the strong jobs report on Friday suggested the market anticipates the Fed will begin to scale back its monetary policy sooner than expected.

"This again suggests that Fed tapering is going to happen; I think that the estimate [to taper] was for October, [but] it looks like it may even happen in September now," said Gene Goldman, director of research at Cetera Financial.

Possibly providing some support to falling prices is Thursday's unprecedented move by the European Central Bank President Mario Draghi to provide forward guidance. The ECB said it doesn't plan to raise interest rates and that it expects key rates to remain the same or at lower levels for an extended period of time.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLD $122.84 1.30%
IAU $12.40 1.40%
ABX $18.47 5.20%
AU $15.90 2.60%
KGC $5.50 6.50%


Chart of I:DJI
DOW 17,740.91 -89.85 -0.50%
S&P 500 2,062.19 -13.62 -0.66%
NASDAQ 4,774.2780 -31.0130 -0.65%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs