Gold Spot Price Open: $1,270
Gold Spot Price Close: $1,257
Change in Gold Spot Price: -$13
Silver Spot Price Open: $17.90
Silver Spot Price Close: $17.31
Change in Silver Spot Price: -$0.59
Precious, once again, spent a majority of the day on Thursday losing value. When all was said and done, gold lost roughly 13 dollars while silver moved downward by nearly 60 cents, approaching a 90-day low. As expected, platinum and palladium also moved downward on the day, with both metals losing a little more than 10 dollars apiece.
Weekly Jobless Claims Set Up Non-Farms Data
The tide seems to be turning and, with each passing hour, an increasing number of people are under the impression that there is no doubt rates will be raised come the December FOMC meeting. The Dollar has continued its trek forward en route to reaching fresh 4-week highs against the Yen. The reason this time? The weekly jobless claims report from the United States, which came back upbeat for yet another week.
According to the data, first-time claims for unemployment benefits fell last week to lows we have not seen in more than 40 years. Last week saw 5,000 fewer first-time claims for unemployment benefits than were filed the week before, bringing the new seasonally-adjsuted average below 250,000. Not only is this a 43-year low, it marks yet another week where the total number of claims has stayed below the 300,000 mark. What’s more, most market experts were anticipating that the number of claims would rise, so it was perhaps even more impressive that they fell by the margin which they did.
Now, as we have been saying all week, eyes will be on September’s non-farm payrolls report expected to be made public sometime in the late morning. Should tomorrow’s report confirm what many are thinking—that the US labor market is as healthy as it has been in years—most are saying that a December rate hike is all but guaranteed. This whole train of thought is adding to the pressure facing precious metals, which are on course for their worst 5-day trading session in months, if not years.
US Dollar Continues its Climb
If you look at the USD Index’s performance over the last month, you will see a very clear uptrend. If you look a little bit closer at the past week or so, the uptrend is seen to be ascending at a rapid rate with each passing day. On Thursday, the USD hit a 4-week high against the Japanese Yen while simultaneously hitting a 10-week high against the Chinese Yuan.
With accommodative monetary policies abounding in Asia, and more restrictive policies taking shape in the US, the inverse relationship between the Dollar and Yen/Yuan should not come as much of a surprise. So long as the US economic data remains as positive as it has been and as positive as everyone expects it to be, there is little doubt that the Dollar can make even larger strides forward. Naturally, however, this is bad news for the precious metals market all around. This is made plainly evident by the fact that investors are so sure losses haven’t concluded that even beaten down prices are not encouraging bargain-hunting buying.
Wrap-Up
As we bring this week to a close, it will be interesting to see what the US non-farms payrolls data has to say. This is going to be the number one focus of the marketplace and, in many ways, is said to be the deciding factor with regard to whether interest rates will be risen or not come December. Should the jobs data beat expectations, metals very well might suffer even further.
