There you have it! Proof that gold needs the Fed’s easy money policy to rally. At least for the short term. Bad economic data leads traders to believe that the Fed cannot take away the punch bowl just yet. However, I still believe that the next big bull market in gold will be driven by long term inflation. How long will they try to tell themselves that this is “transitory”? How long exactly is transitory? How much more evidence does the Fed need to see in terms of inflated costs?

But let’s focus on today. The monthly jobs report was a big miss from what the market was looking for. The market was expecting added jobs in September to be in the neighborhood of 475,000 to 500,00. What we got was 194,000 jobs added. A big miss. The lowest number this year! So, a big miss like that ahead of next months Fed Announcement leads traders to believe that the Fed will not need to get aggressive with tapering or move projected rate hike dates up. Gold is up $22.00 after this bad jobs number. If gold today can close above $1,781, the 5- day moving average, that would be considered friendly to the gold bulls. Next technical level to the upside would then be $1,800.

Gold Dec ’21 Daily Chart
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Frank J. Cholly

Senior Market Strategist
Frank is a swap registered trader who brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
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