The US economy created far fewer jobs than expected in October. This created a modest buying momentum in the gold market. According to renowned commodity investor Dennis Gartman, gold’s long-term bull trend continues to be well supported by bullish fundamentals. However, Gartman says the market is a bit frothy and is due for a correction.
US labor market slowed down in October!
U.S. nonfarm payrolls increased by just 12,000 last month, according to the Bureau of Labor Statistics. Economists had expected a job gain of around 100,000. This monthly figure significantly missed consensus forecasts. Some economists are downplaying the latest employment data, noting that the government warned of potential data uncertainty due to hurricanes that affected Southern states at the beginning of the month. Meanwhile, the US economy created fewer jobs than expected, while the unemployment rate remained unchanged at 4.1%.
According to some market analysts, the persistently high inflation rate while the labor market is weakening puts the Fed in a difficult situation. The report reveals that average hourly earnings increased by 0.4% last month. Economists had expected wage growth to be 0.3%. Over the past year, wages have increased by 4.0%. The gold market welcomed the latest non-farm employment data. Thus, the shiny metal rose to session highs.
Dennis Gartman: It is possible for the gold price to fall, but…
cryptokoin.comAs you follow from , investment demand pushed gold above $2,800. Dennis Gartman expresses his concern about the attention gold has received in the last few weeks. Gartman: “I continue my long-term bullishness on gold. But I’m a little worried in the short term. The public has fallen a bit in love with gold in the last two weeks. “It bothers me a little bit,” he says.
In this correction, Gartman says gold prices could fall another $50 in the near term as investors adjust inflation expectations. Gartman states that the correction potential in stock markets will also contribute to the near-term risks of gold. It also notes that it would potentially trigger a liquidity event. In this context, Gartman said, “Weakening stock prices will put some downward pressure on gold in general. Because gold will always be a place where liquidity can be found to meet margin calls,” he says.
famous e mtia y investor: I will continue to recommend Gold!
But Gartman looks beyond gold’s short-term volatility. Therefore, he remains a long-term bull. “The main trend is still from lower left to upper right,” Gartman said. Gold remains strong in dollar terms. Gold in euros is even stronger and gold in yen is the strongest. “I will continue to recommend people to own gold in dollars, euros and yen.” he says.
Gartman notes that gold remains well supported as geopolitical uncertainty increases safe-haven demand and central banks continue to increase interest in the precious metal. Demand from the official sector has slowed down in recent months. However, Gartman thinks high inflation will force central banks to continue increasing gold reserves for the foreseeable future. He explains his thoughts on this subject as follows:
I don’t think inflation is going away. In fact, I think it will continue to get worse. No matter who is elected to office, government debt will continue to rise, driving up inflation, which will create trouble for economic activity.
