Jobs Data Not Good News For Gold, Silver

Published on Friday, 03 February 2012 20:37 Written by Todd Shriber

New York, February 3^rd (TradersHuddle.com) – It was certainly good news the Labor Department delivered this morning, saying that 243,000 new jobs were added last month and that the U.S. unemployment rate of 8.3% is the lowest it has been in three years. Good news that is for most concerned except for gold and silver bulls. Both precious metals were subject to some intense profit taking on the day as the job’s report appeared to add to the conflict of whether gold is risk on or safe haven trade.

Late in Friday’s trading session, the iShares Gold Trust (NYSE: IAU) was off 1.8% on strong volume while the iShares Silver Trust (NYSE: SLV) was off 2.4% on above average volume. The case of silver being lower is a perplexing one because with half of all silver demand coming from the industrial side, it would seem logical that positive U.S. economic data would prop up the white metal. That was obviously not the case today and it might be a sign that silver is preparing to consolidate or pullback before rocketing higher in the coming months.

Other precious metals that are levered to economic data points were lower on the day as well. The ETFS Physical Platinum Shares (NYSE: PPLT) was off half a percent in late trading and the same loss as seen for the ETFS Physical Palladium Shares (NYSE: PALL). PALL’s small loss may be a technical case as the ETF was positive earlier in the session after breaking through the critical resistance at $70  we mentioned yesterday. From there, sellers came rushing in to force PALL back below the all-important $70 area. The ETF has not closed above $70 since late September.

The precious metals weakness permeated the miners as well with the Market Vectors Gold Miners ETF (NYSE: GDX) down over 2% on above average volume late in Friday’s session. The Global X Silver Miners ETF (NYSE: SIL) was down 1.1% late on volume that was more than double the daily average. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) was found taking a 2% breather of its own.

Dr. Copper was the metal that benefited from the U.S. jobs data. Shares of Freeport McMoRan (NYSE: FCX), the largest U.S. copper miner, gained 2% on above average volume. The Global X Copper Miners ETF (NYSE: COPX) was also up 2%. While the percentage gain is lower at 1.8%, a more interesting case might be the iShares MSCI Chile Investable Market Index Fund (NYSE: ECH). Chile is the world’s largest copper producer and ECH is loving the risk on trade coming back. The ETF looks poised to close above its 200-day line and that could set it up for a run back to the mid-70s in the coming months.