The gold and silver markets had very much been marking time over the past couple of days waiting for what most expected to be a decent April U.S. non-farm payrolls rise of over 200,000.  In the event the figure came in at a much weaker than expected 160,000 and the figure for the previous two months was also revised downwards.  Some had thought that a strong payrolls figure might persuade the U.S. Fed to increase interest rates by another 25 basis points at its June FOMC meeting.  Such expectations have now taken another blow.

In a reaction to the seen-as-poor payrolls figure gold immediately shot up sharply.  The price had already been moving up in this morning’s trade in Europe, but once the payrolls figures were announce in the USA, the yellow metal climbed back above the $1,290 level with some speculating that it may be on its way to $1,300 for the third time this month, and that if it passes this level again  that then it could possibly be there to stay, at least for a while.  At the time of writing the gold price rise was stuttering a little having reached a high of over $1,295, but had since fallen back to below the $1,290 figure.

The US dollar also weakened a little today which will have helped the dollar gold price and Asian and European equity markets had also trended lower with the expectation that U.S. equities would open lower too.  With suggestions that investors should exit the equity markets and go for gold from as heavy a hitter as Stan Druckenmiller and a Bank of America Merrill Lynch analytical report suggesting buying gold miner Randgold paper to take advantage of a rising gold price, the general negativity on gold as an investment in North America from some of the market elite seems to be disappearing quite rapidly.

Silver has also been moving up quite nicely in concert with gold, although the gold:silver ratio had moved back above 74, but we suspect that if gold does break through $1,300 again the ratio will begin to come down again.