Gold Spot Price Open: $1,117
Gold Spot Price Close: $1,139
Change in Gold Spot Price: +$22
Silver Spot Price Open: $14.60
Silver Spot Price Close: $15.36
Change in Silver Spot Price: +$0.76
Precious metals made nice gains on Friday after a weaker than expected employment report was published by the US Labor Department. When all was said and done, gold gained more than twenty dollars while silver picked up more than 3/4’s of a Dollar. Platinum and palladium also gained on Friday, with platinum picking up less than 5 dollars while palladium gained more than twenty.
Employment Report Weighs on Equities
The biggest focus for investors both today and this week remained the Labor Department’s employment report for the month of September. In the lead-up to today’s data release, the market was expecting to see at least 200,000 jobs added to the economy last month. When the report was made public, however, it was reported that fewer than 150,000 new jobs were created last month. This report was extremely disappointing and almost immediately weighed on the value of equities while lifting up gold and silver spot values. Wages also took a step backwards during September while both August and July’s employment reports were revised downward.
While it is nice to see today’s report on employment give spot values a boost, investors are much more concerned with what today’s data has done to the outlook on interest rate hikes. The latest commentary we have heard from the United States Federal Reserve holds that rates will still be raised this year, but recent economic data suggests otherwise. Commenting on today’s employment data was uss Koesterich, BlackRock’s global chief investment strategist, when he said, “There’s just no positive spin you can put on it. Combined with other reports, it really raises questions about the strength of the recovery.”
Interest Rate Hike Expectations Take a Hit
All in all, these past 5 days have not done the expectation that interest rates will be hiked this year any favors. In fact, the past few major pieces of economic data we have received indicate that the Fed may have a very good reason to keep rates exactly where they are at; at least for now. With the Fed’s next meeting only a few weeks away, we can expect that speculation regarding interest rate hikes will continue.
Dan Greenhaus, chief strategist at the brokerage BTIG in New York wrote a note to his clients today and said that they “see almost no way the Fed can raise rates at its October meeting. As a result of this report, investors should rightly be debating whether the Fed can or should raise rates at its December meeting.” At this point it seems far too early to make a final decision on whether you can expect interest rate hikes or not, but things are beginning to look bleaker and bleaker with each passing week.
Wrap-Up
As we bring this week to a close and look forward to the first full week of October trading, the market can expect the interest rate hike speculation to continue. On top of that, we are sure to be dealt a good bit of month-end economic data not only from the US, but from other countries around the world as well. The Volkswagen emissions debacle is still unfolding, and it will be interesting to see where that story goes. After all, whatever the outcome may be for Volkswagen, we have already seen the price of platinum take a significant and lasting hit thanks to the scandal.
