Gold prices took a hit following the strong non-farm payrolls report, falling as low as $1162.10. The U.S. Department of Labor said the U.S. economy added 280,000 jobs in May versus consensus of 225,000. The report suggests that there is momentum in the labor market and the economy is slowly making a recovery, which is bearish for gold because there is speculation the Fed may impose an interest rate hike. Gold is typically viewed as a safe haven, so as fear and uncertainty start to come out of the market, investors shy away from the yellow metal and look to other asset classes. Eric Zuccarelli, metals trader on the NYMEX trading floor, tells TheStreet’s Jill Malandrino most markets were impacted by the strong data, but the technical picture remains poor for gold. Regardless of what non-farm payrolls indicated, Zuccarelli says crude’s fundamentals remain poor as reports continue to show historic highs on daily production, even with idled rigs. All of this production further adds to the supply glut and Zuccarelli does not see that situation easing up any time soon as OPEC refused to cut production. Based on the charts, the picture for copper looks poor with the low for the past 6-8 weeks at $2.66. Even though copper held up relatively well as other markets were under pressure, Zuccarelli says it is most like a temporary thing.
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