Non-Farm Payrolls report this coming Friday may be a market mover.

It is not so much the report itself, but the implications it has to the actions of the Fed which have been distorting markets, back and forth, for the past 30 years.

Gold is often correlated to the US Dollar. Especially if you are looking at the price of gold in Dollars, also known as the gold-dollar currency cross.

Some of the correlation is just the relationship of gold and the Dollar to other things, most likely the real interest rates of Treasuries. But there are certainly other factors. I did some in-depth work on this in the past.

One thing I would caution on is the notion of monetarism, the Dollar as a physical commodity, which was promoted so hard by Milton Friedman years ago. It has been generally discredited but is a sticky notion. At the extremes it certainly manifests. But otherwise, it is just another economic fad that shines for a day and then falls into well-deserved disrepute.

Have a pleasant evening.

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