Daily Market Update 4/1/11

GOLD
Gold was down $10.90 today, closing at $1,427.40 per ounce on news that job growth had accelerated in March. The Labor Department said the non-farm jobs had increased by 216,000 which was higher than expected and lowered the unemployment rate to 8.8%.

Initially the price of gold dropped over $25 on the job news reaching $1,412.00 on ounce, at that point Gold & Silver bargain buyers stepped in and the price rallied sharply. 

Let me explain why the job increase news lowered Gold and Silver prices. The feeling is that if the economy is recovering faster than expected, the Federal Reserve Bank may end QE2 early without spending the 600 Billion originally announced, and possibly then the Fed would start raising interest rates. The U.S. dollar index pushed to a fresh daily high on the stronger jobs data, which in turn put some more downside price pressure on the gold market.

SILVER
Silver values reacted with Gold and closed down $0.18, and ended at $37.62 per ounce.

Crude oil prices are higher Friday morning and are nearing the March high of $108.25 a barrel. The inflationary implications of crude oil prices above $105.00 a barrel remain bullish for the precious metals markets

Today’s Important News
The Commerce Department stated today that February construction spending fell 1.4% to a seasonally-adjusted annual rate of $760.6 billion, the lowest level in more than 11 years.