Unusual divergence, given recent correlations

As I write this post, the U.S. stock market has shot up: the Dow's up 1.38%; the S&P 500's gained 1.57% and the NASDAQ's leapt up 1.75%. This jump-up comes thanks to the recent job report, which showed a drop in the unemployment rate to 10.0%. The market was expecting it to stay at 10.2%. More encouraging was the job-loss figure for November: instead of an expected 130,000 loss, the U.S. economy lost only 11,000. [Details here. The Business Insider has a more detailed breakdown of the report here.]

For macro traders, this is incredible news: no wonder the three major averages leapt up. On the other hand, gold's still languishing below $1200. As of the time of this post, spot gold's at $1189.40. The near-term positive correlation between gold and stocks is nowhere to be seen now.

This could be explained by traders forgetting about gold for the nonce and piling into stocks. The decline in gold below $1200 times up with the release of the jobs report, which suggests hot money dumping gold and moving into stocks. However, this negative correlation does hint that the Fed may act to jack up rates earlier than many gold bulls think. A rate rise would impact the carry trade as well, which would spike the greenaback up and produce a plummet in bullion's price.