Why bad news for workers is great news for gold

Anthony Bradshaw | Getty Images

As soon as the jobs number came out on Friday morning, gold immediately shot $20 higher. This is a clear reflection of the number's weakness.

Nonfarm payrolls data showed that 169,000 jobs were added in August, compared with estimates of 180,000 jobs. And at this point in the recovery, 169,000 jobs is simply not good enough.

And while the unemployment rate dropped to 7.3 percent, that was because fewer people were looking for jobs. Incredibly, the labor force participation rate dropped to 63.2 percent, which is the lowest it's been since 1978.

(Read more: Gold has become a 'Humpty Dumpty' trade)

While I don't think this weak number takes a Federal Reserve tapering of quantitative easing off the table, it could certainly lead the Fed to taper at a slower rate.

Again, after five years of stimulus, these numbers are simply not where they should be. So why would the Fed scurry for the exit now, instead of tapering down its bond-buying program at a more manageable rate?

The idea that the Fed could taper less aggressively than originally thought is giving gold a bid. Right now, what gold is telling me is that we could get a taper of $10 billion to $15 billion, rather than $20 billion to $25 billion.

(Read more: Top technician is sure that gold's going to $1,200)

With the jobs number out of the way, we still have Syria to focus on—and traders down here at the Nymex are telling me that no one wants to be short gold if the U.S. strikes Syria. After all, gold is something that people tend to buy in times of fear. And with the market unclear about what the ramifications of a U.S. strike on Syria could be, "fear" is the word of the day.

So how am I trading the shiny stuff now?

I think you can see gold test $1,425 again, once it gets through resistance at $1,400. On the downside, gold will find support at $1,350.

Anthony Grisanti is the founder and president of GRZ Energy. Follow him on Twitter: @AnthonyGriz.

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