Gold and Miners Jump as Dollar Dumps

Jon Blogosphere, Economy, Gold, Market Commentary, Precious Metals

This morning’s dismal jobs report pushed Treasury prices sharply higher and bond yields lower. The 10-Year Treasury Note Yield plunges to the lowest level since August. Treasury bond prices saw the biggest gains, while investment grade corporate bonds also bounced. High yield bonds, which are highly correlated to stocks, are falling. Gold shares are also having a strong day on the back of a strong commodity. That’s being helped by lower rates and a weaker dollar. Stocks also opened lower on the jobs report.
Gold and gold miners benefit from falling bond yields today. Gold is a non-yielding asset. As a result, its appeal increases when bond yields fall. That’s especially true if the dollar is dropping as well (more on that shortly). Gold may also be benefiting from increased tensions in the Mideast. The daily bars on the first chart show the Gold SPDR (GLD) jumping the equivalent of $23 dollars today ( 2.2%). Gold is recovering from a five-year low, and has a long way to go to reverse its major downtrend. The same is true of gold miners.

This post was published at GoldSilverWorlds on October 2, 2015.