This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Nonfarm Payroll Data Just May Boost the Gold, Silver Market

Stocks in this article: GLD SLV ABX GG

NEW YORK (TheStreet) -- The price of gold remained relatively flat over the past week, but tomorrow the publication of the nonfarm payroll report may affect gold (GLD) and silver (SLV). Let's see how.

To begin, the SPDR Gold Trust (GLD) opened sharply higher today, up 0.75% to $120.66 per share as of 10:15 a.m. (Don't get too excited: gold prices are down 4.4% over the past month.) iShares Silver Trust (SLV) shot up 1.27% to $18.29. (Silver is down 3% over the past month too.)

In the past, the release of the nonfarm payroll report used to have a negative correlation with the direction of gold prices. In other words, as the number of jobs rise, investors tend to have more confidence in the progress of the U.S economy. Then the demand for investments like gold tends to soften.

This relationship, however, isn't perfectly consistent, as you can see in the table below. Note that dates are listed as Day/Month/Year:

Source: CME, ADP and Bureau of Labor Statistics.

In the first three reports of the year, when the change in employment didn't meet the ADP projections (see the numbers listed in red), the price of gold rallied on the day of the release of the nonfarm payroll report. Conversely, when employment grew and even exceeded expectations (as in the March 7 report), the price of gold dropped.

Overall, the correlation between the changes in employment and price shift of gold on the day of the report's publication is -0.31.

If the correlation holds up, and if the upcoming labor report doesn't meet the current estimates of 179,000 jobs added, the price of gold will bounce back Friday.

In such a case, gold-related investments such as Barrick Gold (ABX) and Goldcorp (GG) are also likely to recover from their ongoing descent of the past several weeks.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs