Gold hit a two-week high because the jobs report came in soft and traders think the Fed won't hike rates as much. That's the story. Gold moved up. Numbers went down. Cause and effect, apparently.
Except gold also went up two weeks ago when the jobs report was strong. And it went down three weeks ago when rate-hike bets eased. And it went sideways when inflation data screamed. The metal has precisely zero interest in your macroeconomic narrative. It moves because someone in Singapore needed to park $400 million before lunch.
But retail traders read "softer-than-expected jobs report" and convinced themselves they cracked the code. They're long now. They texted their cousins about it. They used the phrase "dovish pivot" in a sentence. They think the Fed watches the same jobs report they do and adjusts policy accordingly, like some kind of economic thermostat designed by people who give a sh*t about your portfolio.
The Fed doesn't care about one jobs report. The Fed doesn't care about gold. The Fed cares about not getting blamed when something breaks. Gold cares about nothing. It sits there. It reflects light. It doesn't read headlines.
Two-week high. What a milestone. Gold was at this exact price 14 days ago and nobody wrote an article. Now it's back and suddenly it means the Fed is easing. Next week it'll drop $30 and the headline will say "Gold plunges on hawkish Fed bets." Same metal. Same Fed. Different guy who needed to sell before month-end.
The jobs report tempered expectations. Gold responded. The correlation is so f*cking clean you could teach it in a seminar and charge $2,000 a seat. Just don't check the data from any other month.
Photo by Dash Cryptocurrency on Unsplash
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