Gold Spot Price Open: $1,128
Gold Spot Price Close: $1,144
Change in Gold Spot Price: +$16
Silver Spot Price Open: $14.35
Silver Spot Price Close: $14.75
Change in Silver Spot Price: +$0.40
Precious metals made nice gains on Wednesday after losing out to profit-taking a day earlier. When all was said and done, gold gained more than 15 dollars while silver moved upward by more than 35 cents. Platinum and palladium also made nice gains on the day as both metals moved forward by more than 20 dollars.
US Economic Outlook Shifts with ADP Jobs Data
In the earlier hours of Wednesday, ADP, the payroll processor, released its latest reading on private-sector job growth. In January, ADP reported that more than 200,000 new private-sector jobs were created. In addition, December’s figure was updated and revised upward. Now, ADP made it clear that more than 265,000 new jobs were added to the economy during December. This was encouraging for investors to see as December was a particularly poor month for job data.
In other news, New York Federal Reserve president William Dudley, in an interview this morning, talked about what a stronger US Dollar might mean for the US economy as we head further into this year. With the US Dollar constantly appreciating and the global economy weakening at every turn, the growing belief is that the US economy will suffer as a result. The reason for this is that a more expensive US Dollar will make US products more expensive as well. With other economies suffering as they are currently, it is extremely likely that companies and individuals will shy away from US goods in search of goods from countries that do not have such expensive currencies.
In summation, Dudley remarked that the Fed will strongly consider extreme tightening of monetary policy to combat any issues created by a stronger US Dollar in conjunction with a weaker global economy.
ISM Non-Manufacturing Data Falls in January
As you may or may not be aware, the US economy is largely based upon services. For this reason, it is particularly disappointing for investors to hear that January non-manufacturing PMI showed a reading of 53.8%, down from a reading of nearly 56% during December.
According to the Institute for Supply Management’s report, “The majority of the respondents’ comments are positive about business conditions; however, there is a concern that exists relative to global conditions, stock market volatility, and the effect on commercial and consumer confidence.”
Now, the attention of the marketplace is slowly but surely shifting to Friday’s non-farms employment report from the Labor Department. This is always seen as a massive bit of economic data, and this time around it is no different. Most people are anticipating that January’s figures will be upbeat, but there is no way to say for sure if this will prove to be the case. The ADP report is not always a good indication of how the non-farms data will play out, but the fact that private-sector job growth was just up above 200,000 has some investors nervous about what Friday’s report will bring.
Wrap-Up
All in all, Wednesday was a nice day for precious metals investors because it showed that both gold and silver have enough upside support to weather a day or two of profit-taking. With that said, investors are now curious to see how the jobs data will affect spot values heading into the weekend. While gold is still on the up and up, some market experts feel as though resistance will be felt as the metal’s spot value closes in on $1,200/ounce.
