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Gold Fall as Fund Shift Observe Intact, TOCOM up on yen

Yellow metal dropped on Monday following rising by the most since November in the previous trading session on poor US jobs data with funds expected to carry on cutting bullion holdings for superior investment yields elsewhere.

Precious metal jumped nearly 2 percent on Friday following statistics showed US employers hired at the slowest pace in nine months in March, backing expectations the Federal Reserve will maintain its bullion boosting monetary stimulus programme.

However gold futures in Tokyo jumped approximately 5 percent to near all time highs following the yen slump to near four year lows on reports that the Bank of Japan would begin buying longer dated bonds instantly to beat deflation.

Joyce Liu, investment analyst at Phillip Futures said that Monday’s price fall shows the fund swing out of precious metal remains intact with the US economy usually expected to perform better in the longer term.

Spot gold slide 0.2 percent to $1,579.06 per ounce by 0309 GMT, also hurt by a firmer dollar against a basket of currencies.

People are actually pulling funds out of precious metal for better investments such as equities and real estate in emerging economies.

The kind of rally that we observe from 2009 to 2011 is no longer going to be there anymore, we are more or less used to having so much money flowing around in the economy.

Liu stated she perceive gold testing a support level of $1,530 per ounce possibly over the coming two weeks.

Gold hit a 10-month low of about $1,539 per ounce previous week and is down almost 6 percent this year.

Evan Lucas, IG Markets strategist said in a note to clients Sunday that the yellow metal was a major beneficiary of this data, because the less than expected jobs numbers saw a slight jump back into safe havens.

Precious metal finished Friday’s session with the climb of $23.50 or 1.5%, at $1,575.90 per ounce on the Comex division of the New York Mercantile Exchange, following the US Labor Department said the economy created 88,000 new jobs in March. That consequence was sharply lower than the 190,000 new jobs.

Gold future for June delivery climbed $1 or 0.1%, during Asian trading to $1,576.90 per ounce.


Gold Rallies as Weak US jobs Statistics Affirms Federal Reserve Easing

Precious metal rallied over 1.5 percent on Friday, its highest one day addition since November, because disappointing US job statistics fueled expectations the Fed will carry on its bullion friendly bond purchases.

The metal break it’s three consecutive days of sharp losses following the Labor Department stated US employers in March hired at the slowest rate in nine months, adding just 88,000 non-farm posts. Heavy bullion short covering and quick losses in US equities also lifted gold prices.

Yellow metal is used by many as a hedge against inflation which can be brought on by central banks monetary stimulus. Gold still lost over 1 percent for the week for one of its sharpest weekly turn down since the start of the year.

The weak jobs statistics condensed the chance the Fed would change its current $85 billion monthly purchases of mortgage backed Treasuries and securities known as qualitative easing in a bid to enhanced economic growth.

Bill O’Neill, partner of commodities investment firm LOGIC Advisors said that the payrolls report gives more credibility to the idea that they are not going to see any reduction in QE3. It’s just a knee-jerk response and he don’t think it necessarily indicates that the market has bottomed out here.

Heavy outflows from precious metal’s exchange traded funds and sharp losses of prominent gold bull John Paulson’s precious metal fund also weighed on investor sentiment.

Bullion accelerated additions throughout the session on the payrolls statistics and was climbed 1.7 percent at $1,579.60 per ounce (1854 GMT), having earlier strike a high at $1,580.80 per ounce.

Trading volume, however was relatively feeble given the sharp rally. Turnover was at about 200,000 lots, in line with its 30 day average.

Yellow metal’s response to the payrolls report was principally strong as previous advances in the labor market had fueled discussion within the US central bank regarding whether to cut back the third round of bond purchases, possibly as soon as this summer.

Gold futures closed more than $20 per ounce higher on Friday, paring their loss for the week because a disappointing US jobs report pressured the US dollar and contributed to a slip in the stock market.

Gold future for June delivery climbed $23.50 or 1.5%, to settle at $1,575.90 per ounce on the Comex division of the New York Mercantile Exchange.


Jobs statistics Are Far Worse Than They Look, Economists Shocked

Economists were shocked by the enormous beat in Friday’s reported job figures. The unemployment rate plunged 0.2 percentage points to 7.7% and the economy purportedly added 236,000 jobs.

According to the household inspection on which the unemployment rate is based the economy added a strong 170,000 jobs. The survey also illustrate a marvelous boost of 446,000 part time jobs.

A Gallup survey on jobs released on Thursday illustrate the percentage of workers working part time however wanting permanent work was 10.1% in February, a boost from 9.6% in January and the greatest rate measured since January 2012.

Gallup survey notes though fewer people are unemployed now than previous year, they are not transfered to permanent jobs for an employer. In reality, fewer Americans are working permanent for an employer than were performing so previous year and more Americans are working part time.

While part time work is obviously better than no work at all, these are not the sort of good jobs that millions of Americans are still penetrating for.

During the previous month there was a rush of 679,000 in the amount of people working multiple jobs. The seasonally adjusted boost was 340,000.

One can preserve the statistics two ways. Either the economy is getting healthier and more jobs are available, or people are working more jobs as their hours were cut and they need an additional job.