Gold rallied overnight, trading in a range of $1285.20 - $1295.75 as it took out resistance at $1289-91 (triple top – 3/5, 3/6, and 3/7 highs).
It was boosted by safe haven buying from heavy declines in global equities, which were spooked by much weaker than expected trade data from China last night (exports off 10.7%, imports off 5.2%) on the heels of the ECB’s surprise slashing of Eurozone growth forecasts and announcing a new round of policy stimulus yesterday.
The NIKKEI fell 2%, the SCI plunged 2.4%, European markets were off from 0.5% to 1.1%, and S&P futures were down 0.4%. Lower oil prices (WTI from $56.51 - $55.60 – slump in Chinese imports) weighed on stocks.
A modestly weaker dollar (DX from 97.65 – 97.41) was also gold supportive, which was pressured by strength in the safe-haven yen (111.65 – 110.94), and a rebound in the beleaguered euro ($1.1179 - $1.1221) - despite a much weaker than expected reading on German Factory Orders.
At 8:30 AM, the US Payroll Report was much weaker than expected, with Nonfarm Payrolls increasing by only 20k (exp. 180k). S&P futures sank further (-26 to 2723 -3-week low), with a further drop in oil (WTI to $54.49) contributing to the move.
The US 10-year bond yield sank to 2.618% - a two month low, while the DX slid to 97.24. Gold spiked higher and took out resistance at $1297 (3/4 high) to reach $1300.75 – with a fair amount of short covering seen.
US stocks had a modest rebound after their open (S&P -16 to 2732), helped by some upbeat comments from White House Economic Advisor Larry Kudlow (encouraged by 0.4% increase in Average Hourly Earnings and decline in Unemployment Rate to 3.8%, Labor Participation...