The price of gold skyrocketed almost $25 within a mere 15 minutes on Friday following the new US jobs data report. The report stated that non-farm payrolls had increased much less in September than many analysts had forecasted.
The September jobs report also added a great amount of confusion for current and future investors about the stability of the global financial economy. The western stock markets had virtually annihilated its previously strong gains, which added even more doubt and worry to the minds of many stock market investors.
According to the jobs report, there were only 142,000 jobs created in the month of September. This is far less than analysts previously estimated. There were fewer jobs created during the months of July and August as well, which has Wall Street seeing a measly 27% chance of a Federal rate hike in December. The probability of an October rate hike is close to none.
Following this news, the US Dollar dropped one cent against the Euro on the FX market, while the price of gold rose 1.9%. This brought the price of gold to $1134 per ounce. This allowed it to recover over two-thirds of its losses earlier in the week. Silver also rose twice as fast, bringing it right above $15 per ounce.
There are two more Fed meetings that are due to take place later this year before 2016. Some expect that the Fed will vote to raise rates after seven years of the rates remaining at 0%. If this happens, stocks could see even more volatility. Even the expectation of an impending rate hike impacts the stock markets. It is this very anticipation of a Federal rate hike that has sent some markets into recent turmoil.
Even though the stock markets are indirectly affected by the Fed’s rate, it causes fear that companies will either cut back on their growth or make less of a profit as it becomes more expensive to borrow. This is what makes investors choose not to invest in them, leading to broader declines in the markets as a whole.
Further declining in the already unstable markets could wreak havoc on the economy and stock market investments. In most cases throughout history, when the value of the Dollar drops, the price of gold and other precious metals rise. Precious metals like gold and silver have always been seen as a trustworthy hedge against inflation. As stock markets around the world are experiencing a lot of shakiness and uncertainty, the prices of precious metals either hold their ground or increase.
Recently, many investors have made the decision to invest, or to shift some of their investments to gold or silver. Purchasing physical gold is a great way to combat losses and drops in stocks, which we have witnessed many of over the past few weeks. Now is a great time to invest in gold and silver. Most people that have chosen to invest in Precious Metals IRA’s have been rewarded with substantial returns on their initial investment. This is due to the fact that these assets tend to increase in value at much faster rates than stocks or mutual funds. Either way, precious metals are considered a great investment strategy that can diversify your portfolio and provide you with financial security.
Capital Gold Group Call 1(800)510-9594, or visit us online at startwithgold.com.
DOWNLOAD YOUR FREE DEFINITIVE GOLD GUIDE
The Definitive Gold Guide:
On January 8, 1835, President Andrew Jackson proclaimed that the last installment of our national debt had been paid, and that the United States was debt free! This was the only time in American history that the U.S. had no debt.