Gold's Near-Term Stage is Set

A lot of financial market watchers have locked on to one main news event: The June 7 US Nonfarm Payrolls report. The problem is -- if you believe the reporting -- the reaction to the news began before the news itself arrived. To wit:  

The hours before, data is bullish:

"Gold Futures Climb to Highest Close Since Mid-May... ahead of the latest monthly figures on US employment. May's US nonfarm payrolls report will be the most influential economic data point used in determining the future of the Fed's quantitative easing program and the prospects for QE will determine the direction of gold in the near-term." (MarketWatch)

The half-hour immediately following the release, that data is a non-event:

"Friday's Gold Movement Finds Little Direction From Jobs Report. A slightly better than expected report shouldn't create enough momentum to drive direction." (Forbes)

Soon after that, data is bearish for gold:

"Gold Falls After Jobs Data... beat expectations, supporting hopes that the recovery of the world's biggest economy is still on track." (CNBC)

The inability of gold to move higher overnight leaves a number of viable scenarios in play here but a quick bottom line is that if prices break 1390, there could be little in the way of buying interest down towards 1370.

From there, gold prices turned down and promptly fell through the 1390 mark down to 1377 before paring losses.