Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.9% after surprisingly strong U.S. employment data lifted the dollar. The non-farms payroll report showed the jobless rate falling to 7.8%, its lowest level since January 2009, as the economy created 114,000 new jobs in September. Totals for July and August were revised higher by another 90,000. The report initially triggered a risk-rally that quickly fizzled as the markets recognized how modest the gains really were, and that the recovery is treading water. Equities finished nearly flat and oil dropped nearly 2%. The other precious metals fell harder than gold, with silver dropping 1.5%, platinum 1%, and palladium leading the way with a 1.7% loss.

At the Comex close: December gold fell $15.70 to $1,780.80; December silver dropped 53 cents to $34.57; January platinum lost $17.90 to $1,707.20; and December palladium retreated by $11.55 to $663.20 an ounce.

Today's minor sell-off in gold was something of a knee-jerk reaction to the idea that QE3 may be truncated by the positive jobs report. However, earlier this week, Fed Chair Bernanke stated emphatically that QE3 would be long-term in order to "provide individuals, families, businesses, and financial markets greater confidence about the Fed's commitment to promote a sustainable recovery." After seeing his "green shoots" shrivel and die on several occasions, Ben is apparently committed to keeping the liquidity flowing until the recovery really takes root. As Bloomberg TV's Michael McKee reported today, despite the jobs report, QE3 is still widely expected to drive the gold price over $1,900 by year-end, and both TD Securities and Commerzbank are calling for gold at $2,000 by early next year.