Gold Spot Price Open: $1,253
Gold Spot Price Close: $1,259
Change in Gold Spot Price: +$6
Silver Spot Price Open: $17.31
Silver Spot Price Close: $17.52
Change in Silver Spot Price: +$0.21
Precious metals are adding value to close out the week, but the week as a whole was nothing short of a major loss for both gold and silver. On Friday, gold managed to gain about 6 dollars while silver added a little more than 20 cents. Platinum and palladium also gained on the day, but their gains were mostly marginal and fell below even $5.
Non-Farms Data Misses the Mark
If you look at just about any other month this year, the ADP private-sector jobs report and the non-farms report delivered by the Department of Labor have almost consistently shown entirely different stats. Considering they are looking to two different job creation metrics, this should come as no surprise, but this week saw the two reports coincide perfectly. When the Labor Department finally released its September non-farms jobs report, it showed that about 156,000 new jobs were created last month versus expectations that called for at least 170,000 to have been created.
This was about exactly what we saw from the ADP report on Wednesday. Perhaps the worst part of today’s report was the fact that the overall rate of unemployment ticked upward to an even 5%, from 4.9%. Making things even worse is the fact that July’s data was revised downward, from over 270,000 jobs being added to just over 250,000.
In the aftermath of the jobs data, gold and silver were able to regain a small fraction of what was lost over the course of Wednesday and Thursday. Still, on the whole, gold and silver are hanging on to see what is going to happen to interest rates. So long as the tone of US employment remains as upbeat as it has been recently, the likelihood of a December rate hike will grow. After today’s data we seem to see some people rethinking whether a December rate hike will happen or not, but the marginal fight back on the part of precious metals shows us that investors are not reading too much into today’s non-farms data.
Dollar Index Set for Nice Weekly Gain
Even though the big news of the week was with regard to the loads of unemployment data being dealt, the US Dollar is stealing some of the spotlight. This past 5-day trading session was the best performance on the part of the USD Index since this past November. This yet one more factor that has people thinking that interest rates will be risen before year’s end. A November rate hike is not very likely to happen, but December’s FOMC meeting seems to be circled on the calendars of many people.
For gold and silver, it is looking like the next month or more is going to see metals trading between a well-defined range, if not falling lower altogether. The prospect of higher interest rates increases the opportunity cost of holding precious metals in lieu of other investments, and that all translates into declining spot values for gold, silver, and all other precious metals.
Wrap-Up
All in all, the last 5-day trading session was one of the most exciting we have seen in recent history. There was a lot of activity going on and even more economic data points for investors to discuss. For precious metals investors, this week was one that we will like to quickly forget. Spot values were in free-fall for a 2-day period and have not really shown marked signs of recovery as of yet. So long as the marketplace thinks that December is going to bring about interest rate hikes, precious metals are going to need something huge in order to give spot values a boost. Right now, however, there are very few fundamentally bullish pieces of economic data supporting the precious metals market.
