Gold Hits Near Three Month Low

Gold prices are hitting around the lowest point it has in nearly three months, which is the result of the jobs report that the United States Labor Department released on Friday. This new jobs report showed that outside of the farming sector, employers added 271,000 jobs in October, which is really good news that the economy is bouncing back for good. This is the most jobs in 10 months, and spurred more talk about the Federal Reserve hiking interest rates in December. The jobless rate also fell to 5 percent, which is the lowest it has been in about 7.5 years.

gold bars

This is actually a lot better than what the economists had predicted, as they believed that jobs would only grow to 180,000 and that unemployment would remain at 5.1 percent, but they were wrong. The US Central Bank policymakers were happy about this news, and investors began increasing their bets that the Federal Reserve would hike up interest rates for the first time in almost 10 years, and this sent the dollar going even higher. All of this good news is good for the United States and other countries as a global economy, but it is hitting the precious metals market hard, such as gold, silver, and palladium.

All of this good economic news from the United States put gold prices lower to start out the week, with spot gold going to $1,089 an ounce, which is not changed that much, but it did have its worst week in two years last week. The metal is the lowest it has been since August, which is yet again when the jobs data ended up edging out expectations from economists. If you want to think about gold, then you must know that gold is nearing the 5.5 year low it was in July, and is only $12 away from that low point, and it is expected to hit that 5.5 year low very soon.

The futures market has even shifted to show that there is a 70 percent chance there will be a December interest rate hike, so this means that gold prices are likely to move lower in the coming weeks. Before the jobs report came out, the futures market had a rate hike set at a 58 percent chance, so as the probability of an interest rate hike goes up, the prices of gold are going to go down, and it could end up going down quite significantly in the coming weeks. The SPDR Gold Trust assets fell .40 percent, and landed at 669.09 tonnes last Friday, which it has not been that low in three months. SPDR Gold Trust is actually the biggest gold-backed exchange-traded fund out there, so this is definitely bad news for gold investors and people who are looking at gold as a potential choice for the future. This is all because investors are getting out of bullion and even the money managers and hedge fund managers cut COMEX gold.

When you look at China, it added about 14 tonnes of gold into its reserves back in October, and it seems that gold from here on out is going to fall. China did increase its gold consumption 7.83 percent in the first 9 months this year when you compare that to the first 9 months from last year. This means that China likely is not going to continue buying gold since there seems to now be a sell off of the precious metal as we inch closer to December. Even platinum fell to a one-month low, moving to $930.50 an ounce. Then you have palladium, which also fell about 1 percent, and it was also trading at nearly a six-week low too.

While there likely is going to be a slow slide in terms of gold, it will not be a huge issue in the coming months, as there is a cultural affinity for the gold so it will always be around somewhat. If you are looking at prices going above $2,000 you are likely not going to see that anytime soon, and in fact, you could see prices falling below $900 an ounce in the next few months.


  1. “The SPDR Gold Trust assets fell .40 percent, and landed at 669.09 tonnes last Friday, which it has not been that low in three months.”

    How reliable are GLD’s holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund. Some other red flags I’ve verified and welcome everyone else to do the same:

    “Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD’s insurance? The prospectus vaguely states “The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody.” When I asked about how much of the gold was insured, the representative proceeded act as if he didn’t know and said they were just the “marketing agent” for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.

    I remember there was a well documented visit by CNBC’s Bob Pisani to GLD’s gold vault. This visit was organized by GLD’s management to prove the existence of GLD’s gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this “GLD” bar was actually owned by ETF Securities.”