[video] Quick Take: Rocky Jobs Report Fuels Gold
Paul Sacks, principal gold trader at Aurum Options Strategies, told TheStreet's Joe Deaux the move seems to be a bit of an overreaction because there seems to be too much emphasis on the report and what it means for tapering.
He added that many market participants now expect the Federal Reserve not to taper its asset purchases until next March or June.
Sacks suggested a "perfect storm" was in place leading into this morning's news release: A poor labor report result and a lot of short-sellers in gold. The poor data report gave gold the pop that it needed and forced shorts to cover their positions, adding to the buying pressure.
He said gold has solid support at $1,250 due to strong physical demand at those levels. Previously, this support was at $1,180 and $1,200, so it's a bullish sign that it's moving up.
He concluded that it makes sense to get long gold, with potential stop-loss targets at $1,250 and $1,200, if they fail to hold as support. However, Sacks did caution investors there will be headwinds and, eventually, tapering by the Fed.
-- Written by Bret Kenwell in Petoskey, Mich.