NEW YORK (TheStreet) -- Gold prices took a hit following the strong Non-Farm Payrolls report, falling as low as $1162.10. The U.S. Department of Labor said the U.S. economy added 280,000 jobs in May versus a consensus of 225,000.
The jobs report suggested that there is momentum in the labor market and the economy is slowly making a recovery, which is bearish for gold because there is speculation the Fed may raise interest rates.
Gold is typically viewed as a safe haven, so as fear and uncertainty start to come out of the market, investors shy away from the yellow metal and look to other asset classes.
Regardless of what Non-Farm Payrolls indicated, Zuccarelli says crude's fundamentals remain poor as reports continue to show historic highs on daily production, even with idled rigs.
All of this production further adds to the supply glut and Zuccarelli does not see that situation easing up any time soon, as OPEC refused to cut production.
In addition, he does not see production cuts out of the peripheral producers because they need the revenue.
Based on the charts, the picture for copper looks poor with the low for the past 6-8 weeks at $2.66.
The bears have been pushing on open interest, and if key levels are broken to the downside, the momentum will follow.
That said, Zuccarelli does not expect a crash in copper, because fundamentally, material is outflowing from the LME (London Metal Exchange) and Shangai stock (copper supply) is coming out of the market as well.