For Gold Price, 'Flat Is The New Down'

New York (July 8)  Summary•If any news would be bearish for gold, the strong US jobs report would be it.

•But after an initial drop, gold rebounded all the way back to $1,360/oz and even above it within the hour before market open.

•If this jobs report can't bring down the gold price, I don't know what can.

•For gold, "flat is the new down": Bad economic news makes the price go up, and good economic news *doesn't* make the price go down.

•Many traders have concluded that $1,335/oz is the best price they think they will ever get to buy gold.

On Friday morning the monthly US jobs report posted a very strong 287,000 jobs created in June. If any news would be bearish for the gold price [SPDR Gold Trust (NYSEARCA:GLD), Sprott Physical Gold Trust (NYSEARCA:PHYS)], this would be it: It should indicate a healthier US economy, a stronger US dollar, and a greater chance of the Fed raising interest rates.

But after falling from $1,360/oz to $1,335/oz upon the immediate release of the news, the gold price quickly rebounded all the way back to $1,360/oz and even above it, within the hour before markets opened in New York. The price has settled back in the $1,350s in morning trading:

If this jobs report can't bring down the gold price, I don't know what can. After all, surprise events tend to make the gold price go up, not down. A strong jobs report is a rare example of a news item that can spark a sharp drop in the gold price in a hurry. But this morning, that sharp drop lasted all of 5 minutes or so.

So I see this morning's gold price action as a very bullish sign for gold going forward. For gold, "flat is the new down". Bad economic news makes the price go up, and good economic news *doesn't* make the price go down. Or as Jim Rickards likes to say, "Heads you win, tails you don't lose."

Soiurce: SeekingAlpha