Gold Spot Price Open: $1,191
Gold Spot Price Close: $1,207
Change in Gold Spot Price: +$16
Silver Spot Price Open: $16.87
Silver Spot Price Close: $17.39
Change in Silver Spot Price: +$0.52
Precious metals bounced back from losses suffered late last week and were able to get their collective heads above key price points. When all was said and done, gold picked up more than 15 dollars while silver added a little more than 50 cents. Platinum and palladium also posted gains above $10 apiece on Monday.
Market Continues to Digest Friday’s Jobs Data
In case you missed it, last Friday’s employment data made public by the US Labor Department showed an increase of non-farm payrolls in September of nearly 250,000. Considering the fact that the market was expecting to see only about 215,000 new jobs added to the US economy, the news was accepted with open arms by those who are under the impression that interest rates in the US will be raised sooner rather than later. In the wake of the jobs report, the value of US equities as well as well as that of the USD shot upward after trending the opposite direction for most of the week. Though today saw equities and the Dollar finish the day in more subdued positions, the fact of the matter is that the market is still very much in the hands of equities and the Dollar.
Gold, silver, and most other precious metals received a nice boost today, but that boost can be attributed to bargain-hunting buying more than anything else. Nonetheless, spot gold has once again inched above the $1,200 mark while spot silver is back up above $17/ounce. Unfortunately, however, there isn’t all that much reason for us to believe that these values will be able to be built upon. So long as the marketplace is convinced of the impending interest rate hike in the US, buying interest in precious metals will be limited, at best.
US Treasury Yields Dip On Poor EU Data
Despite the fact that most of the market is under the impression that interest rates in the US will be hiked sooner rather than later, the exact definition of what “soon” means is up for debate. Just today, US Treasury yields moved lower due to some poor economic data from Europe as well as a part of last Friday’s employment report that showed hourly wages in the US are not rising as quickly as they should be. Though there were plenty of jobs added to the economy in September and the employment rate dipped below 6% for the first time since 2008, the fact that hourly wages have only risen by bout 2% in the past 12 months is worrisome to many experts and investors. Though it is encouraging to see job growth continuously getting better in the US, it is no secret that the Fed wants the job market to be hitting on all cylinders before any interest rate hikes are enacted.
Commenting on the job market in the US was Wilmer Stith, of Baltimore-based Wilmington Trust, who said, “It’s another reminder that Janet Yellen is calling the shots, and that she is looking at things more broadly and deeply than just unemployment and payrolls growth.”
In addition to all of this, reports released today showed that German industrial orders fell by almost 6% in August. This is more bad news for a region of the world that is doing terribly from an economic perspective and does not seem to be getting any better. As always, we will continue to keep a close eye on any and all data coming from Europe as we are really approaching crunch-time with regard to whether the ECB has to take more drastic measures in order to curb growing deflationary pressures.
Wrap-Up
As we look ahead to the rest of the week, there really isn’t all that much markets-moving economic data on the table. Pro-Democracy protests are still unfolding in Hong Kong, but have calmed down significantly from where they were a week or more ago. Still, with any amount of unrest lingering in the financial capital of the world it will be important to continue paying attention to.
