Following news that U.S. nonfarm payroll and employment growth was weaker than expected in March, gold futures jumped more than 1% on Friday. According to reports from the Labor Department, 192,000 jobs were created in March, 8,000 shy of the 200,000 the government body and other analysts had predicted. Gold, which has seen huge sell-offs over the last few months as the American job market continued to improve, saw futures spike by an estimated 1.47%, closing out Friday at $1,303.50 an ounce.
Is Now the Time to Buy?
With the latest stumble in the American jobs market, investors are beginning to wonder if they shouldn’t start buying up the precious metal again. Many are still kicking themselves for failing to buy gold under similar circumstances in the past, when similarly shaky growth numbers saw silver and gold values rapidly climb. If investors had bought silver in 2000, today they could sell off the metal for a 500% return. Similarly, gold purchased in 2003 would earn a 600% return on investment.
While some argue that optimistic estimations of U.S. job growth for April will see gold futures return to their February free-fall, many other industry insiders are arguing that now is the time to buy. For Casey Research, the fact that China and other U.S. rivals have been stockpiling gold, not U.S. Treasuries, should be sign enough that the role of gold will not be vacated anytime soon. The value of buying, just as a matter of world economic power, continues to grow.
Of course, for others, like Forbes, pricing estimations make for far more reliable reasons to buy than what China, Germany, and other world players are doing. Even with Friday’s bump, gold values remain approximately level with its average cost of product and below its average cost of production to proportionate supply. In other words, now is the time to buy low so you can sell high.
Have rallied gold futures made you rethink your stance on investing in gold or other precious metals? Let us know in the comments below.