Non-farm payrolls shook opportunities out the market - eToro Tips & Picks

AFTER last week’s payrolls in the US surprised with a weaker than expected reading, a previously directionless market has been opened up to a whole host of opportunities.

Gold prices jumped aggressively after the US non-farm payrolls showed growth of 215,000 jobs rather than the expected 270,000. They had been hovering at lower support levels, with many expecting a test of the psychological $1,000 level, however we are now looking at a push back above $1,100.

Oil is another play that has been watched closely by investors. Crude oil has now dropped below the $45 per barrel level and is looking like it could well head lower.

All eyes will be on the oil inventories this week to see if the Opec oil cartel is ready to cut production. It seems unlikely, so it is looking like the glut in oil and lower prices could be around for a little while longer.

Sterling-dollar has also become a lot more interesting. Friday’s jobs data may have pushed a US rate hike beyond September, but last week’s UK data has pushed a hike in Britain back too. It is yet again a battle of the central banks as to what direction the pair will take next.

Overall, it’s been a hard slog finding good trading opportunities. But after Friday’s non-farm payroll shake-out, there are definitely options around.

James Hughes is chief market analyst at eToro.

ETORO POPULAR INVESTOR

GEORGE THOMPSON @MISTERG23

Grandad probably told you to put your money in gold – such a safe, tangible investment that always goes up and defies even the worst economic hiccups. But gold isn’t like a stock or a bond: it offers no earnings, no premium for the risk of holding it. While many consider it a store of value, a safe alternative to currency, the reality is that it has no intrinsic value. It is worth only what people are willing to pay for it.

The price of gold rises because people buy it, and people buy it because the price goes up. At the end of the day, gold is a speculation, not an investment. If you had “invested” $1 in gold in 1802, it wouldn’t even be worth $2 today. The same dollar invested in bonds or stocks would be worth in excess of $1,000 and $700,000 respectively. Gold – not so shiny after all.

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