| Merit <b>Gold</b> | Merit Financial Market Update - May 02, 2014 Posted: 02 May 2014 01:58 AM PDT Market Updates Posted May 02, 2014 Gold prices rallied in mid-morning trading Friday, reversing losses from earlier in the session, which initially came in the wake of a stronger-than-expected U.S. nonfarm payrolls report for the month of April.
Labor Department data revealed earlier that U.S. employers boosted payrolls in April by 288,000, the most since January of 2012. The number easily surpassed analysts' forecast for an increase of 215,000, following gains of 192,000 in March.
The jobless rate plunged to 6.3 percent, the lowest since September 2008.
"The big drop in the unemployment rate may cause some concerns in consideration of what the Fed may do," Russell Price, senior economist at Ameriprse Financial in Troy, Michigan told Reuters. "But I still think that we're looking at a second quarter of 2015 likelihood for the first consideration for the hike in the Fed funds rate."
The Fed has targeted short-term rates of between zero and 0.25 percent since December 2008, and has promised to keep them there for a "considerable time" after it ends its bond-buying program.
Gold initially came under pressure in this morning's payrolls data, but quickly rebounded on expectations for rising inflation due to the pickup in U.S. economic growth.
"Gold had an initial dip on the much higher than expected jobs number, but quickly rebounded to head above the key $1,280 support level," Jason Rotman, president of Lido Isle Advisors in Newport Beach, Calif told Marketwatch.
"Gold had an initial downside reaction because better jobs numbers can indicate higher rates sooner, which is typically not bullish for gold," he said. However, Rotman suspects that gold briefly rebounded "due to an overall perception that higher jobs growth indicates a stronger global economy, which could push up demand for gold as global wealth increases."
On Thursday, gold came under pressure after data revealed a rise in U.S. consumer spending and income, and following the Federal Reserve's decision this week to continue tapering its monthly bond-buying program.
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| Merit <b>Gold</b> | Merit Financial Market Update - May 01, 2014 Posted: 01 May 2014 09:16 AM PDT Market Updates Posted May 01, 2014 Gold prices ended Thursday's trading session moderately lower, edging down after data revealed consumer spending and personal incomes rose more than expected in March, a day after the Federal Reserve said it was cutting the size of its monthly bond-buying program, which has supported gold since 2012
The data followed a report from the Commerce Department showing U.S. personal spending rose 0.9% in March, up from an upwardly revised 0.5% the previous month and ahead of expectations of 0.6%.
Consumer spending is considered the single biggest driver of U.S. economic growth, accounting for as much as two-thirds of economic activity.
The report also showed personal income rose 0.5%, beating expectations for a 0.4% increase and after gaining 0.4% in February.
Also Thursday, the Institute for Supply Management said its index of purchasing managers rose to 54.9 last month from a reading of 53.7 in March, beating analysts' forecasts for a rise to 54.3 in April. ?
Downbeat data from the U.S. Department of Labor was the lone standout in Thursday's batch of U.S. economic reports. Data showed the number of individuals filing for initial jobless benefits last week increased by 14,000 to a seasonally adjusted 344,000. Analysts had expected jobless claims to fall by 11,000 to 319,000.?
Meanwhile, traders continued to digest the Federal Reserve's decision Wednesday to continue trimming its monthly asset purchase program, citing policymakers' view that the U.S. economy is showing adequate signs of improvement, and is thus in less need of monetary stimulus.
?"Information received since the Federal Open Market Committee met in March indicates that growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions," the Federal Open Market Committee said in a statement.
"Labor market indicators were mixed but on balance showed further improvement."? ?
As expected, the Fed stressed that even when its stimulus program wraps up, interest rates will remain very low for some time afterward.
"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run," the statement read.
The Fed will reduce its bond purchases beginning in May by $10 billion to a total of $45 billion a month.?
?Investors are now looking ahead to Friday's closely watched U.S. jobs report for April, which is expected to indicate that the recovery in the labor market is continuing. Want weekly Viewpoints & market updates delivered via email? Enter your email to receive articles, interviews & exclusive offers! |
| Merit <b>Gold</b> | Merit Financial Market Update - April 30, 2014 Posted: 30 Apr 2014 01:17 AM PDT Market Updates Posted April 30, 2014 Gold trimmed earlier losses in late-morning trading Wednesday, but still held in a negative trading range, as investors weighed data showing U.S. economic growth stalled last quarter, boosting demand for bullion as a haven.
Gold briefly fell to the lowest levels of the session earlier after payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 220,000 in April, above expectations for an increase of 210,000.
Prices recovered, however, after the Commerce Department released data showing the U.S. economy expanded at its slowest pace in three years during the first three months of 2014. Gross domestic product grew at an anemic annual rate of 0.1% in the first quarter, easily missing expectations for growth of 1.2%.
This morning's reports heightened uncertainty ahead of Friday's U.S. monthly nonfarm payrolls data, and the Federal Reserve's latest decision on U.S. monetary policy, due later this afternoon.
"Clarity on interest rates and/or taper beyond June is what traders are looking for in FOMC meet," said Chintan Karnani, chief market analyst at Insignia Consultants in New Delhi, according to Marketwatch. "Views on [the] U.S. economy will be relevant only if growth forecasts are lowered or the Federal Reserve sounds a bit of caution on future growth."
"After the announcement of FOMC statement the possibilities are (a) Strong U.S. economic growth plus taper beyond June equals gold falling to $1,230 and below, (b) Neutral to cautious tone on U.S. growth prospects plus hawkish tone on taper at June meeting or further FOMC meetings after June equals gold rising to $1,335 and $1,392 and more," said Karnani.
Elsewhere, traders have largely shrugged off the most recent developments in Ukraine, where pro-Russian separatists stormed regional government offices in the eastern city of Luhansk on Tuesday.
The European Union and U.S. imposed fresh sanctions against Russia on Monday. 17 companies and seven individuals in all were targets in this latest round of sanctions; however, President Obama said he was holding broader measures against Russia's economy in reserve. Want weekly Viewpoints & market updates delivered via email? Enter your email to receive articles, interviews & exclusive offers! |
| Merit <b>Gold</b> | Merit Financial Market Update - April 30, 2014 Posted: 30 Apr 2014 07:25 AM PDT Market Updates Posted April 30, 2014 Gold prices ended Wednesday's U.S. trading session moderately lower, following the Federal Reserve's decision to further reduce its monthly asset purchases to $45 billion, citing policymakers' view that the U.S. economy is improving and is in less need of monetary stimulus.
While the unemployment rate remains elevated, the labor market is improving, while fiscal factors that have weighed on recovery in the past are diminishing as well, the Federal Open Market Committee, the Fed's rate-setting body, said in a statement.
"Information received since the Federal Open Market Committee met in March indicates that growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions. Labor market indicators were mixed but on balance showed further improvement," the Fed said in its statement.
"Household spending appears to be rising more quickly. Business fixed investment edged down, while the recovery in the housing sector remained slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.
As expected, the Fed stressed that even when its stimulus program wraps up, interest rates will remain very low for some time afterward.
"The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored," the Fed statement read.
"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."
Today's decision had been widely anticipated by market analysts, but nonetheless fueled criticism over the Fed's apparent "rosy" interpretation of recent U.S. economic data.
Gold came under pressure earlier in the session after payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 220,000 in April, above expectations for an increase of 210,000.
Prices recovered, however, after the Commerce Department released data showing the U.S. economy expanded at its slowest pace in three years during the first three months of 2014. Gross domestic product grew at an anemic annual rate of 0.1% in the first quarter, easily missing expectations for growth of 1.2%. Want weekly Viewpoints & market updates delivered via email? Enter your email to receive articles, interviews & exclusive offers! |
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