Precious Metals prices were rising after a report indicated only 69,000 new jobs were added for May, pushing the unemployment rate to 8.2 percent. Todd Schoenberger at the BlackBay Group in New York said, “For those lucky enough to have a job, their spending power is sliding when accounting for inflation.The markets will respond negatively to this report.” The market was reacting negatively to this data, while Precious Metals were benefiting. The housing market will be affected by the weaker than expected jobs report, said Doug Duncan, chief economist at Fannie Mae. Duncan said, “The recent trend is reminiscent of the monthly patterns of the spring slowdown witnessed over the last two years that continued through the summer months. If this pattern recurs,  we expect that hopes for a meaningful housing recovery will be delayed once again.”

The Gold price rose above $1,600 this morning, responding to the pessimistic jobs data. Richard Hastings at Global Hunter Securities said, “Gold reacts beautifully, and with the best price action, on U.S. troubles, and this morning’s wonderfully wobbly jobs data did the trick. Not only would there be more speculation about (a third round of quantitative easing) … but all of the data speak to tax revenue dilemmas due to growth limitations, and this means the U.S. budget comes back into focus. If this occurs, then Gold could rally this summer. If neither occurs, then Gold would remain under pressure due to the return of deflation.”

At 1:14 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,619.40, Up $55.70.
• Silver, $28.66, Up $0.81.

In overnight and early morning trading, Precious Metals prices were on the rise ahead of a key jobs data report due for release today. Worries continue to mount over European Union economic issues, andChinese manufacturing data continues to shrink, but Precious Metals are offering some safe haven protection. Current economic conditions have some  investors hopeful that another round of quantitative easing  could be back on the table. Analyst Michael Lewis said, “The payrolls number today could be important in terms of whether it shows ongoing weakness. If we do see that, that could introduce quantitative easing speculation. … Dollar strength is going to be the big problem over the next few weeks.”

The jobs data could be good or bad -- speculation is running the gamut at the moment. Credit Suisse economist Jonathan Basile said, “I would say there’s been a downshift  in forward looking labor indicators that’s going to continue. We’re not going back to the 200,000 plus numbers anytime soon. Faster job growth needs people and companies to open their wallets. Higher jobless claims are another way to handicap that. The higher they go, the more it means there’s ‘risk off’ in labor decision making. … But we have gotten a run of information that’s a little bit softer from a layoff perspective and just solidifying a downshift in job growth. It’s not just information that tracks the labor market. The growth number didn’t make the grade.” A large issue at hand is the exposure companies have to international markets. Economist Stephen Stanley said, “The sources of impediments to growth really aren’t on the demand side.The biggest problem that we have right now is uncertainty. Europe is coming back to the fore again.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,584.10, Up $20.40.
• Silver, $28.02, Up $0.18.

Interest rates on  10 year Treasury bonds  hit their lowest point ever today as more investors fled risky assets, also driving stocks to continue their recent slump. Interest rates on bonds fall when there is greater demand in the market. “If you look at the global marketplace, we are the supermarket of safety,” said William Larkin, a fixed income  money manager  for Cabot Money Management Inc. “We’re talking about an elevated level of fear. This is mainly driven by growing uncertainty in Europe. People are saying, ‘I can buy the Treasury and I know my money will be returned to me.’ ” Gold also tends to be a fear-based investment, as people seek a store of value in times of uncertainty.

Crude oil also continued its slide, falling below $87 a barrel. Overall, oil futures slid 17 percent for May, the largest monthly decline in crude prices since the height of the financial crisis, when demand fell dramatically. The recent downturn in prices also seems to be due to a decline in demand. “This fresh downward pressure we see [in oil] is not about global supply risk, which has already been priced in, but is rather about demand weakness,” said Seth Rabinowitz, who oversees commodities as a partner at Silicon Associates. Rabinowitz cited weak economic data in America, the eurozone, and India as key indicators of slow demand.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,561.00, Down $4.20.
• Silver, $27.77, Down $0.30.

American stock futures and European stocks fell this morning after the release of the monthly jobs report by payroll processor Automatic Data Processing Inc. The report showed a  worse than expected gain  of 133,000 jobs from April to May, and last month’s numbers were revised down by 6,000.  Weekly jobless claims also rose by 10,000  last week to the highest level in five weeks. The information isn’t a good sign for employment in the United States, which has been a point of contention among investors looking for some sort of economic stimulus from the Federal Reserve to support the markets. With the news, the American dollar is slightly lower, and Gold seems to be trading mostly flat.

Regardless of jobs information, the main driver of the market recently has been events in the eurozone, and that continues to be so.  Spain  clearly seems to be the eurozone’s biggest problem  at the moment. Reuters states that the word “crisis” can be added to just about anything concerning Spain and it will apply: “Liquidity crisis, debt crisis, banking crisis, economic crisis, confidence crisis, investor crisis, jobless crisis. Spain … has them all.” One diplomat said, “Markets are good at pricing risk, but they hate uncertainty -- and right now that uncertainty is killing Spain.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,567.00, Up $1.80.
• Silver, $28.03, Down $0.04.

American stock futures and Precious Metals are trading lower this morning in the wake of another credit rating downgrade in Spain.  Borrowing costs in that country soared, and it has now become a matter of when, not if, a bailout will be necessary. Reports are also showing that the European Central Bank has rejected Spain’s plans to recapitalize Bankia SA, its largest bank, which put a dagger in sentiment. This news drove up the American dollar, while Precious Metals have been pushed down.

A quick look at the headlines on CNBC’s website confirms that most of the focus is on the eurozone. One headline is particularly interesting, with an analyst suggesting that  Spain could exit the eurozone before Greece. For Spain, the eurozone’s third largest economy, leaving the euro may not be that country’s choice but instead may be the European Union’s. “They are too big to rescue, they have no political hang ups about rupturing their relations with the EU, they are already fed up with austerity, and there is a bigger Spanish-speaking world for them to grow into,” said Matthew Lynn of Strategy Economics.

Many investors are fearing that China could be slipping into a similar situation to that of 2008 and 2009, but top advisers said “massive fiscal stimulus”  is not the answer at this time. Richard Boucher of the Organization for Economic Co-operation and Development said, “I don’t think we’re back in that kind of acute crisis phase. … It is not just a question of money. The Chinese authorities have a whole variety of tools to use to stabilize the right level of growth. … I think signs that Chinese growth is stabilizing at a steadier level, a more sustainable level, would be good for everybody.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,549.60, Down $0.90.
• Silver, $27.76, Down $0.12.

Through the weekend, Precious Metals prices have remained relatively even, but prices took a quick jump as American markets opened. Precious Metals prices tracked a bit higher as the euro continued to climb back from a nearly two year low against the dollar. Both currencies are susceptible to the ongoing eurozone debt crisis. Commodities consultant Peter Fertig said, “Gold will be in a critical position at least until the Greek general election taking place on June 17. … Should there be a majority for a government led by the conservative New Democracy,  chances are quite good that Gold would rebound. That would also support the euro, it would support stock markets.”

The  strength of the dollar is evident  as its accessibility as a high quality asset continues to shrink. Since July 27, the dollar has climbed against the other 16 major currencies. International investors and financing institutions that can only own high grade assets are finding a much tougher time locating quality investments that are not backed by the dollar. Ken Dickson said, “We’re seeing many more periods of dollar buying during these uncertain times.” Hungarian bank president Andras Simor said, “The number of euro-denominated assets that meet our quality standards has dropped radically. More and more securities were dropped from our portfolio as the credit grade of more and more countries fell below the single A category and as more and more securities don’t meet our market quality requirements.”

Meanwhile, European companies have  already begun preparing for a Greek exit from the euro. Some companies not only are planning for a change to the new drachma, but also preparing in the event of civil unrest, looting and getting cash out of Greece as potential exposures. Roger Bayly said, “Most companies are getting ready and preparing for a Greek exit and have looked at cash, treasury and currency issues.”

At 9:06 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,581.00, Up $10.30.
• Silver, $28.59, Up $0.11.