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Gold Price Drops 1.2% in 15 Mins from 4-Month High on Stronger US Jobs, Zero Inflation

October 15, 2015

GOLD PRICE gains from overnight were swiftly erased near 4-month highs in London trade Thursday, with spot bullion retreating 1.2% inside 15 minutes after the release of stronger US data on inflation and jobs.

Jobless benefits claims fell last week to new 8-year lows. So-called “core” consumer prices rose 1.9% per year in September, but inflation fell back to this spring’s 0% reading when “volatile” fuel and food items are included.

Gold priced in Dollars peaked at $1190 per ounce just as that news was released, more than 10% above late-July’s fresh 5.5-year lows and almost 3% higher for this week alone.

Shanghai gold prices had earlier closed the day higher in Yuan terms, but slipped to a discount to London quotes for the first time in 2 months, ending Thursday some $1.50 per ounce below the global benchmark for bullion settlement.

Gold priced in Euros meantime hit 3-month highs above €1040, and the metal set new 4-month highs against the British Pound and Swiss Franc.

This week’s poor US retail sales data, plus China’s slowdown, “undercut the rationale for a rate rise…and helped propel gold,” reckons a note from bullion bank HSBC’s precious metals analysts.

“But more than that, we continue to sense changing attitudes to gold from investors.”

Wednesday saw the first inflows in two weeks to the giant SPDR Gold Trust (NYSEArca:GLD) – the world’s largest “gold backed” ETF – with a 7.7 tonne addition marking the largest 1-day growth since gold’s sharp New Year rally.

That took the GLD’s total bullion holdings back to 694 tonnes, a new 8-year low when first seen in mid-July.

Advising a 5-10% allocation in gold this week, Paul Singer of $27 billion hedge fund Elliott Management says gold “feels like something institutional investors need to own…[as] the value of paper money is affirmatively aimed at being degraded by central bank policy.

“The supply of gold cannot be radically expanded in a short period of time.”

To boost inflation, “It’s quite obvious that…additional sets of instruments are necessary,” said European Central Bank member Ewald Nowotny – head of Austria’s central bank – in a speech Thursday, because the ECB will “clearly miss” its 2.0% target for consumer-price rises despite this year’s turn to quantitative easing and zero rates.

Any rise in US interest rates, added ECB vice-president Vitor Constancio separately, risks “spillovers [that] might be larger” on the Eurozone of 19 nations “than the domestic effects in the US.

“The global economy has become more vulnerable than ever before…We are still far from having a global lender of last resort adequate for our times.”

Household gold demand in the key Indian market – now in the peak buying season culminating with Diwali next month – has turned higher meantime, according to the Economic Times, with “footfall” to large retailers growing even as prices have rallied during the “auspicious” festival of Navrati on Hindu calendars.

Gold 'In Play' for Comex Traders as Price Touches 200-Day Average 1st Time Since May

October 15, 2015

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GOLD PRICES set new 16-week highs in London trade Wednesday, touching their 200-day moving average – a ‘key’ chart level according to many technical analysts – as weak Chinese inflation data were followed by news of a sharp drop in US retail sales in September.

The Dollar fell near 1-month lows against the Euro on the FX market, but the gold price for German, French and Italian investors still rose towards its strongest levels since mid-July at €1030 per ounce.

Excluding automobiles, US retail sales fell 0.3% last month from August, while US manufacturing prices fell at their third fastest pace of the last half-decade, down 0.3% when “volatile” fuel and food items are excluded.

China’s consumer price index earlier showed inflation slowing to 1.6% per year from August’s 13-month high of 2.0%.

Factory prices in the world’s second-largest economy fell in September for the 42nd month in succession.

Recording an afternoon London benchmark price of $1173.90 – some 8.6% above late July’s fresh 5.5-year low of $1080 – gold priced in Dollars touched its average of the last 200 days for the first time since May in spot bullion trading.

Not seen for more than 2 sessions running since February, a rise above the 200-day average held true without pause for five separate year-long stretches during the long bull market in gold prices between 2002 and mid-2008, and was again unbroken between January 2009 and December 2011.

Gold price in US Dollars per ounce, 200-day moving average

Gold prices in China – the world’s biggest destination for physical bullion – also rose in Yuan terms on Wednesday as the Chinese currency’s official exchange rate was cut by Beijing.

With Dollar prices elsewhere in the world hitting new 3-month highs however at $1175 per ounce in spot trade, Shanghai gold closed Wednesday at a near-zero premium to the global benchmark of London quotes – sharply below the $2.50 premium averaged over the last 12 months, and deterring new imports after reaching above $8 earlier this week.

Beijing’s new approval for commercial banks to “re-lend” against collateral of existing bank loans does not represent quantitative easing, the People’s Bank’s chief economist said today, calling the market’s reaction to last week’s news a “misreading” and saying that the move “will not have any significant impact on the overall liquidity,” according to Reuters, “and it’s not the Chinese version of QE.”

Gold’s latest Dollar-price gains are “mostly” due to hedge funds buying Comex derivatives contracts, says one bullion bank’s daily note, led by “a mix of algo signals” triggering computerized trading programs plus “supportive signal” from the Euro gaining versus the Dollar and “commodity and macro-fund positioning [both in] options and directional [bets].”

“Gold is so in play,” says one futures broker, noting what he calls “big footprints” in Comex trading volumes.

Gold investment ETF holdings, in contrast, continued to hold flat for the week, and bullion dealers reported only “average” demand from the key Indian consumer market, despite the approach of next month’s festive Diwali buying spree on Hindu calendars.

Silver meantime caught up with gold’s latest rally, finally breaking back above $16 to reach its highest Dollar level since late-June, gaining 14.9% from mid-August’s fresh 6-year low of $14.00 per ounce.

Gold Price Regains 1.5% Drop Amid 'Noise' on US Fed Rates, Weak China, Negative Inflation

October 14, 2015

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GOLD PRICES regained most of an earlier 1.5% drop from yesterday’s 3-month Dollar high in London on Tuesday, trading back above $1165 per ounce as US Fed officials disagreed about the odds of a December rate rise, and New York stock markets followed Europe and Asia lower following poor Chinese trade data.

China’s trade surplus rose to a new record of $60 billion in September thanks only to a 17% year-over-year collapse in imports.

US investment bank Goldman Sachs now calls the slowdown in emerging markets “a new wave in the Global Financial Crisis,” moving on from first the US and then Eurozone.

Gold priced in British Pounds meantime hit new 4-month highs Tuesday above £765 per ounce – gaining 10% from August’s fresh 5.5-year lows – after new inflation data showed UK consumer prices falling year-over-year last month.

Reading -0.1% for the second time this year, the UK government’s preferred CPI measure of inflation read below zero in September for only the second time on its 26-year data series.

US consumer-price inflation data for last month are due Wednesday.

Germany’s consumer price index today showed 0% change in September from 1 year before, slipping 0.2% from August.

“There’s too much [noise] out of Federal Reserve officials right now,” says one bullion bank’s sales desk today, saying that “too much talk has a weakening effect on global markets and adds unnecessary volatility – especially when there’s nothing to say.”

US Fed vice chair Stanley Fischer yesterday called a December rate hike “an expectation, not a commitment.”

Fed governor Lael Brainard overnight made what she called “the case for watching and waiting…[because] in contrast to the considerable progress in the labor market, inflation has been stubbornly low, even excluding energy prices.”

But the FOMC “has laid out clear goals based on a legislated mandate,” countered St.Louis Fed president James Bullard this morning, and “the goals [of zero-rate policy] have arguably been met.

“There is little downside” to so-called ‘lift off’ from zero, said Bullard – a known ‘hawk’ who yet failed to join Richmond Fed president Lacker in voting to raise rates at the September meeting – “as policy will still be exceptionally accommodative during the normalization process.”

Dollar gold prices have risen up “through the 2015 downtrend and [are] approaching the 200-day and 55-week moving average,” says technical analyst Karen Jones at German bank Commerzbank.

“We suspect longer term that the market is attempting to base,” says Jones, pointing to a pattern on the monthly price chart and calling “the recent low at $1077…an intermediate

turning point.”

Tuesday morning’s dip “[was] clearly profit-taking by speculative financial investors,” reckon Jones’ commodity-desk colleagues at Commerzbank, who add that yesterday’s “failure of the gold price to exceed its August high presumably sparked selling for technical reasons.”

Monday’s rally to $1169 “took the market slightly by surprise amidst short covering and some fresh buying,” says broker David Govett at Marex Spectron in London, warning against bullish forecasts and saying “these moves are predicated more by position covering than genuine investor business.”

Gold Hits 3-Month High, Nears 1st LBMA Conference Gain Since 2010 as Mitsui Rumored to Quit

October 13, 2015

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GOLD PRICES rose near 3-month highs in London trade Monday morning, briefly touching August’s high at $1169 per ounce as the US Dollar fell on the FX market and a strong rise in Asian stock markets failed to buoy European shares.

Silver meantime failed to break back above $16 per ounce however, and gold then retreated 0.5% after this morning’s auction to find its market-wide clearing price on behalf of members of the London Bullion Market Association came in at $1164.20 per ounce, the highest benchmark gold price since 24 August, and on similarly low trading volumes.

With 1 week to go before the gold and silver market’s annual LBMA conference – held this year in Vienna – gold prices were today on track to avoid a year-on-year gain between these key presentation and networking events for the first time since 2010.

Delegates at last year’s LBMA conference in Lima, Peru had been more bullish, forecasting on average a price of $1200 per ounce by the 2015 event.

LBMA annual conference, delegates' 12-month gold price forecast 2008-2015

Market-making member of the LBMA Mitsui & Co. – a division of Japanese conglomerate Mitsui, founded in 1876 and named last month as being under investigation by Swiss competition regulators for “possible collusion” along with 6 banks over bid-and-ask prices in the spot market – will apparently shut its London and New York precious metals businesses later this year, according to two anonymous “sources” speaking to newswire Thomson Reuters today on the sidelines of the London Metal Exchange’s opening LME Week seminar.

“A spokesman for the Japanese trading house declined to comment,” Reuters says.

Besides quoting bid and ask prices for both gold and silver bullion in ‘spot’ trade, Mitsui & Co’s London subsidiary is also a participant in the daily LBMA Silver Price benchmark auction.

All of the other 5 direct participants are banks.

“One thing remains certain in an uncertain world,” said a dealing note from Mitsui’s Hong Kong office Friday, “and that is that positive ‘animal spirits’ still seem scarce” in precious metals trading.

New analysis from fellow market-maker, US investment bank Morgan Stanley – a direct participant in silver’s sister benchmarking process, the LBMA Gold Price – today repeated its 2015 average gold forecast of $1154, with a longer-term price of $1100 per ounce.

Gold bullion prices face 5 risks, Morgan Stanley’s team says, pointing to better US growth, “universally low inflation”, the potential for “loss-covering liquidation in China” as its slowdown hits real estate and equity prices, lower anxiety of ‘Grexit’, and a lack of support from mining costs as the sector benefits from lower oil prices in particular.

US investment bank Goldman Sachs – also a London market maker, and a direct participant in London’s gold and platinum price benchmark auctions – today repeated its 3-month forecast of $1150 gold, with a drop to new half-decade lows $1050 in the next 12 months.

Conference chat at LME Week meantime focused on the growing “glut” of base metals being supplied to the market as China’s growth rate slows, plus counterparty and credit-default risks worsened by the recent 7-year lows in prices.

“Continued uncertainty has weighed on volatility and risk appetite,” says specialist site Fast Markets, “making for a chilly and barren landscape for traders and brokerages.”

Gold Trading Quiet as Price Hits 7-Week High After Fed Minutes, Seen Below $1000 in 2016

October 10, 2015

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GOLD TRADING in London saw prices hold firm on Friday, recording the highest weekly close at the benchmark LBMA auction in 7 weeks at $1151 per ounce.

World stock markets also rose to 7-week highs in aggregate following Thursday’s release of minutes from the US Federal Reserve‘s September policy meeting, which showed only 1 member out of 10 voting to raise interest rates from 0% as previously hinted and expected.

Trading some 0.9% higher from last Friday afternoon’s benchmark, today’s auction took only 1 round to find its market clearing price, with the bid volume worth $89.8 million – barely half the July-September average.

Gold trading in Shanghai had earlier risen a little following yesterday’s return from the National Day ‘Golden Week’ holidays. Silver volumes were higher again, touching fresh multi-month highs.

Silver’s benchmark price in London – also discovered by electronic auction on behalf of trade body the London Bullion Market Association – today found its highest level since mid-June at $15.99 per ounce.

The LBMA’s executive management London today issued a request for information from “potential solution providers” after a strategic review of the City’s bullion market – heart of the world’s wholesale trading – advised it seek “greater transparency…to attract greater liquidity [and] to increase efficiency and lower the costs for institutions of doing business.”

Latest data from the UK’s tax authorities today showed net outflows of 112 tonnes from London’s specialist gold bullion vaults in August – the sharpest drop since last November’s near 5-year low in prices – as the monthly average in Dollar terms hit fresh 5.5-year lows at $1117 per ounce,

Now totalling 300 tonnes in 2015 so far, gold bullion outflows from London are 50% ahead of the same period last year.

The gold price crash of 2013 saw a net total of 1,439 tonnes of large, 400-ounce bars leave the UK, primarily destined for Asian markets via re-casting into kilobars in Switzerland.

“Looking at 2016,” says a new precious metals analysis from French investment and bullion bank Natixis, “we believe the price of gold will continue to be heavily influenced by the Fed’s interest rate decisions.”

Despite last month’s delay, “Rising interest rates increase the opportunity cost of holding gold,” Natixis’ analyst Bernard Dahdah goes on, forecasting an average 2016 price of $990 per ounce and saying that “demand from central banks and China are expected to remain weak compared to previous years [while] supply from physically-backed ETPs is expected to continue at a slow pace.”

Gold imports to India – to which Natixis says it is one of the largest suppliers – reportedly fell over 50% in September from a surge in August, according to Bloomberg News today, retreating towards previous monthly averages at 67 tonnes.

Bullion Steadies from China Drop, 'Sentiment Changing' Even as Silver ETF Shrinks Again

October 9, 2015

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BULLION PRICES rallied from an overnight drop Thursday in London, recovering after China’s key markets returned from a week-long holiday to find gold and silver trading 2% and 6% higher respectively in Yuan terms.

Prices fell from the start of trade in Shanghai, dropping 0.8% for gold bullion and almost 4% for silver by mid-morning in Dollar terms in London dealing.

Gold prices then steadied above $1137 per ounce, some 1.4% below Wednesday’s new 2-week high.

“Despite consistent selling on this latest rally,” says the trading desk at Swiss refining and finance group MKS, “it feels like there is a bit of a change of sentiment amongst traders.

“Investors are not as pessimistic towards the precious.”

Dealers at Japanese trading house Mitsui Global Precious Metals meantime say that, using Ichimoku technical analysis, gold prices earlier this week “broke up above the Daily Cloud top…which now lies at $1140.

“The short term trend is strongly positive. [But] gold is hitting resistance from a simple trend line that extends back to the January 2015 high. This is the fourth touch, so a close above $1147 this week would look positive.”

Silver meantime recovered Thursday’s earlier drop to $15.41 to reach $15.66 per ounce – a level which bullion-bank Scotia Mocatta’s technical analysts saw as likely “support” in their Wednesday night comment, because it marked August’s high.

The Gold/Silver Ratio – which simply divides the gold price by the silver price, to judge their relative strength – had fallen for 7 consecutive sessions, Scotia’s technical note added.

Thursday saw the Gold/Silver Ratio recover as gold held firmer than silver, rising from yesterday’s US finish below 71.5 to reach 73 ounces of silver bullion per 1 ounce of gold.

ETF investors meantime again cut their position in silver products Wednesday, extending the drop in the quantity of bullion needed to back the shares to well over 200 tonnes from this time a month ago in the giant iShares Silver Trust (NYSEArca:SLV), taking it to new 3-year lows at 9,802 tonnes.

The leading gold ETF – the SPDR Gold Trust (NYSEArca:GLD) – dropped almost 2 tonnes Wednesday, retreating to a 1-week low at 687 tonnes.

Looking meantime at key consumer gold markets, proposed tax changes in the United Arab Emirates “could hit” what specialist analysts Metals Focus call “improving” demand across the Middle East region, led by Saudi Arabia and – “albeit from a low base” – Iran.

Gold $1150 'Important' If Not 'Deadly' as Silver ETF Bullion Shrinks to 3-Year Low on 10% Price Jump

October 8, 2015

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GOLD BULLION failed to hold above $1150 per ounce for the second session running in London on Wednesday, edging back to $1145 as silver crept back above $16 for a 10% gain in 1 week.

European stock markets meantime cut earlier gains back near zero for a third day in succession, as New York equities held flat and US Treasury bonds retreating, nudging yields higher once more from last week’s sudden spike to 2013 lows after Friday’s shock slowdown in US jobs data.

“A failure to break $1150 could hence prove deadly for the remaining year,” says one bullion bank’s sales desk of the gold price, now “waiting and watching for a decisive break.”

That level of $1150 marks “the technically important 100-day moving average” of gold prices, adds German bank Commerzbank.

“If gold conclusively breaks $1150 and holds above,” adds David Govett at London brokers Marex Spectron, “then we may see…$1175, but I don’t see the price moving much higher than that.

“The market was definitely short last week,” Govett adds, pointing to bearish bets against prices being forced to close at a loss on the rise, “and in the wake of the very weak [US jobs data] has had to cover into a very illiquid market…with the white [metals of silver and platinum] leading the way.”

Bullion holdings at the giant SPDR Gold Trust (NYSEArca:GLD) were yesterday unchanged despite gold making near 2-week price highs, reflecting constant demand for the trust fund’s shares and needing 688 tonnes of backing – some 0.2 tonnes below Friday’s 5-week high, but halving from the peak of end-2012.

The largest exchange-traded silver fund, in contrast, shrank Tuesday to a new 3-year low, down 0.5% for the iShares Silver Trust ETF (NYSEArca:SLV) to need just less than 9,856 tonnes to back its shares – also traded like the GLD on the New York Stock Exchange.

Germany’s Bundesbank – the world’s second-largest national gold holder behind the US – meantime published a 2,308-page PDF listing its entire bullion reserves, stating inventory number, weight and fineness but not brand or bar serial number in a bid to disprove what German media called “conspiracy theories that it has been lying about the amount of gold it holds.”

Listing over 95,000 bars it holds in Frankfurt, the Bundesbank also lists the weight and fineness of more than 35,000 bars held at the Bank of England in London for a custody charge, plus 24,500 held at the Banque de France in Paris (all scheduled to be removed to Germany by 2020), and a further 115,431 held for no storage charge at the Federal Reserve Bank of New York.

The Bundesbank’s top-line data show an average fineness of 0.997 pure gold in the bars – meeting the minimum fineness of 0.995 set by the international wholesale market’s London Good Delivery standards.

The average weight of the bars reported today on the Bundesbank’s list also suggest they all meet LGD standards – the largest size in common production – at 402 Troy ounces, some 12.52 kilograms.

New data overnight from Beijing meantime suggested that the People’s Bank of China added another 15 tonnes to its gold bullion reserves in September, the third such addition since June, when it announced a 58% rise from 2009 after transferring metal from other accounts.

Slower than August or July, that 15 tonnes remains almost twice the average monthly pace of gold accumulation over the last 6 years.

Silver Price Jumps 3rd Day, Breaks $16 Level to Hit 200-Day MA Up 10% from End-Sept

October 7, 2015

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SILVER PRICES exploded for a third day running in London on Tuesday, jumping another 3% to reach what technical analysts called key technical levels at $16.05 per ounce and outpacing gold as the Dollar weakened following the worst US trade deficit data for 7 years.

Reversing all of the last 3 month’s drop to new 6-year lows against the Dollar, silver also shot higher for Eurozone and UK investors, breaking sharply above €14 and adding almost £1 since a week ago to near £11 per ounce.

With Chinese markets still closed for the week-long National Day celebrations, gold also rose but again lagged silver prices, touching 7-session highs just shy of $1150 per ounce – a new half-decade low when first reached on the way down last November.

New York stock markets meantime fell, and European equities cut earlier sharp gains, after new data showed the US trade deficit yawning to the widest August gap since 2008 at $48 billion on a 4-year low in export sales.

“Short term a rebound is on” in silver prices notes one bullion bank’s technical chart analysis today, with the metal peaking 10% above last week’s close to September, and gaining over 14% from August’s new 6-year lows at $14 per ounce.

Silver turns over one-tenth as much as gold by Dollar value in London’s professional bullion market, center of the world’s wholesale physical trade.

Daily price history since 1968 show silver moving 1.75% for every 1% move in gold, both up and down.

Bearish betting against silver by money managers trading US Comex futures and options grew 15% in the week ending last Tuesday, latest data from regulator the CFTC say, reaching a gross notional short position of $2.4 billion.

Managed-money long positions held unchanged at $3.1bn, some 29% larger.

Gold futures and options, in contrast, saw hedge-fund and other speculative financial players cut their Comex short bets by 15% last week, down to $8.5bn against bullish bets some 55% greater, equal to $13.2bn of metal.

“Silver’s interim low” around the $14 level, says Karen Jones in her Bullion Weekly Technicals for German bank Commerzbank, has been “reinforced [since August’s low] gearing up for a challenge of the 200 day moving average at $16.04” per ounce.

Gold has meantime “tested and seen a strong rebound from the 3-month uptrend at $1104,” Jones adds, “and is expected to tackle the 2015 downtrend [now at] $1150.”

“Short term,” agrees Stephanie Aymes in her technical analysis at French investment and bullion bank Societe Generale, “gold looks poised to inch higher towards $1148/1152 – the descending trend line.”

Further “upside [is] limited” however, says Aymes, because the recent August and July highs of $1163 and $1173 respectively on gold’s price chart “remain an important resistance.

“Only a break above [that level] will mean an extended rebound” for gold prices.

Gold Prices Firm, Silver Jumps Again as Odds of Fed Rate Hike Slashed by Weak US Jobs Data

October 5, 2015

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GOLD PRICES eased but held 90% of Friday’s $30 jump in London trade Monday, sitting above $1135 per ounce as world stock markets extended the strong rebound in New York equities following last week’s surprisingly weak US jobs data.

Japan’s Nikkei added 1.8% and France’s CAC40 rose 3.5%, while silver jumped ahead of gold prices again, adding another 35 cents to Friday’s sudden 80c move to reach 6-week highs above $15.60 per ounce.

“The Fed’s credibility is at stake if it fails to move on interest rates this year,” says Mitsubishi Corp’s precious metals analyst Jonathan Butler, noting that the US central bank has “spent the past two years preparing the markets.

“As such, Q4 could be a difficult one for precious metals if rate rises are priced in.”

The chances of a US rate hike by December “have dwindled”, says French investment bank and bullion market maker Societe Generale, now putting the odds of a delay until March 2016 at 50-50.

But for gold prices – and with traders in No.1 consumer market China on holiday until Thursday – “physical demand has been muted so far,” SocGen goes on.

“The mood is rather to sell into price-strength until the broader sentiment towards gold improves.”

Gold shipments into India’s western state of Gujarat fell 80% last month from September 2014, the Times of India reports.

US bond traders now price the odds of an October “lift off” from zero at just 1-in-10, Bloomberg News says, citing futures market positioning.

Former US House speaker Stan Collender now sees a 50% chance of a government shutdown in December – such as happened in late 2013 – when the current stop-gap agreement over the debt ceiling expires.

The US Fed lacked the tools to prevent the financial crisis starting in 2007, several senior members told a weekend conference in Boston about “macroprudential monetary policy”, and the central bank remains “a long way from being able to successfully use such tools” today.

More banking executives “should have gone to jail”, former US Fed chair Ben Bernanke told USAToday on Monday, blaming them for causing what it calls the Great Recession of 2008-2011.

The UK’s Financial Conduct Authority – the only regulator so far to identify and fine a bullion bank for ‘control weaknesses’ inviting a member of staff to try and rig gold prices – now regulates three times as many companies as it did before the crash, an FCA member told a meeting entitled “regulation and responsibility” on the fringes of governing political party the Conservatives’ annual conference in Manchester this morning.

Looking at today’s gold price charts, “From a technical perspective,” says a note from ICBC Standard Bank’s commodities team, “Friday’s bounce slowed the downward momentum in gold but a close above $1148 is needed to turn the outlook more positive.

“A move up through $1160 would break a weekly downtrend stretching back to mid-2012 and open the way to $1200.”

Gold Price Jumps $25 in 15 Minutes After 2nd Weakest US Jobs Data in 18 Months

October 2, 2015

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GOLD PRICES jumped almost $25 in 15 minutes on Friday after new US jobs data said non-farm payrolls grew much less in September than analysts forecast.

Western stock markets slashed earlier strong gains but US Treasury bonds leapt, driving the yield on 10-year debt down to 1.95% – the lowest level since April.

Adding 142,000 for last month, the US government’s non-farm payrolls estimate badly missed consensus predictions of 203,000 with the second lowest addition in 18 months.

The US Dollar dropped over a cent against the Euro on the FX market following the news, while gold rose 1.9% to $1134 per ounce – recovering two-thirds of the week’s earlier losses.

Silver rose twice as fast to reclaim all but 10 cents of this week’s drop and edging just above $15 per ounce – a new 6-year low when broken decisively this summer.

“I expect that we’ll reach our maximum employment mandate in the near future and inflation will gradually move back to our 2% goal,” said San Francisco Federal Reserve Bank president John Williams – known as a ‘centrist’ rather than a ‘dove’ or ‘hawk’ on raising rates – in a speech Thursday.

“In that context, it will make sense to gradually move away from the extraordinary stimulus that got us here.”

Today’s jobs data held the US unemployment rate unchanged at 5.1%.

US consumer price inflation was last seen at 0.2% per year on August’s official data.

With two Fed meetings now left before 2016, Williams yesterday repeated earlier comments that he expects the Fed will vote to raise rates after 7 years at 0% “sometime later this year.”

“The prospect that the turn in the US monetary cycle is still imminent,” says a new note from precious metals analyst Robin Bhar at French investment bank and bullion market maker Societe Generale, “remains central to our view that we remain bearish for the yellow metal.”

“Our view is still that the Fed will hike in December,” says FX strategist Steven Barrow at investment and bullion bank ICBC Standard Bank.

“[But] if economic data, like payrolls, start to peel back, perhaps in response to weaker export orders, the Fed might be forced into believing its rhetoric from September, that overseas factors should stall lift-off.”

Ahead of Friday’s weak US jobs data, Dollar gold prices had been on track for their sharpest weekly in almost 7 months according to Bloomberg data.

“A strong print,” the Wall Street Journal this morning quoted Swiss bank and bullion market maker UBS’s precious metals analysts, “holds downside potential for gold.

“The risk [was] that there may be limited immediate support as participants in India are out today for a public holiday while participants in China have been out from yesterday for the Golden Week.”

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