Gold took another $30+ plunge at or around the time the latest U.S. job figures were released on Friday and appears to be making heavy weather of coming up with any significant recovery from the decline.

Indeed it has taken another dip this morning in London as high frequency trades kicked in at open and again at 10.00. Cynics would say that the release of the U.S. figures gave those who are wishing to see the gold price fall the opportunity to have another go at driving down the market – successfully it would seem – as there was virtually nothing in the U.S. employment situation to suggest that the U.S. Fed is anywhere near tapering (winding down its bond purchasing policy) – fear of which seems to be the so-called analysts’ reasoning-of-the-moment behind the latest bout of gold and silver price weakness.

In fact the U.S. unemployment rate actually rose – from 7.5% to 7.6% – despite a perhaps slightly above consensus rise in non-farm payroll jobs which was what hit the headlines, although this was offset for the most part by a small retrospective reduction in the figures for the prior two months. Employment should be rising at this time of year due to seasonal factors so there was really nothing in this set of figures to justify a gold price downturn of this kind of magnitude. Any ‘tapering’ still looks to this observer to be as far away as ever.

Another theorist suggests that the unemployment figures meant, on analysis, that tapering is not imminent and people who’d switched from the stock market to precious metals in fear of a stock market collapse immediately switched back again (a theory which is contrary to most other analysts’ thinking) – however the speed and severity of the gold price initial fall at virtually the exact time the employment figures were released officially suggested otherwise – more likely a large player, or players, dumping paper gold – again. With the Chinese in the throes of the three day Dragon Boat public holiday, markets in the country, which is currently the biggest importer of gold, will be closed until later in the week, thus mitigating any recovery generated there.

What should be more concerning in the U.S. is manufacturing output which will be having an impact on earnings, which could come back to bite the recent stock market revival. This seems to be built on little more than political and Fed hype and posturing and continued Quantitative Easing. The most recent very poor first quarter figures from manufacturing giants like Caterpillar should have been seen as particularly worrying regarding ongoing market strength – and a sharp market downturn, in the absence of any real sign of the tapering buzz word – could indeed push investors back into gold. But the market seems hugely resilient for the time being. Even a 17.5% fall in Japan’s Nikkei index between late May and early June had virtually no knock-on effect in the West, although this could be the shape of things to come.

Read More at MineWeb . By Lawrence Williams.