Gold's Best Day in Weeks Reversed by Contradictory Labor Market Data

The gold price experienced its best day in weeks after Waller's dovish remarks yesterday. The two-year yield fell to 4.32 percent, and the 10-year closed at 4.76 percent for a second day of declines. This led to gains in the Dow, S&P 500, and Nasdaq, with their strongest performance in nearly a month.

However, the data did not cooperate as expected. Payrolls rose 162,000 in August, which is the strongest month since March. The unemployment rate held at 4.1 percent, and wages rose 0.3 percent. This caused short-end yields to jump, and the USD Index reversed from its weekly low near 98.9 to trade above 99.3.

The hike odds that Waller had pulled to 50 percent went back above 60. The yen remains near 155, and the Bank of Japan is still expected to hike on September 18. Despite this, the dollar is rising anyway, with gold giving back a hundred dollars on a week when oil rose 7 percent.

Przemyslaw K. Radomski, CFA, notes that his outlook and positions remain unchanged, and his profit-take levels are still in place. He believes there's tremendous profit potential in this situation, especially from a long-term perspective.