Gold Spot Price Open: $1,201
Gold Spot Price Close: $1,170
Change in Gold Spot Price: -$31
Silver Spot Price Open: $16.26
Silver Spot Price Close: $15.96
Change in Silver Spot Price: -$0.30
Precious metals began the day posting small losses, but those losses were greatly magnified upon the release of the latest employment data from the United States. When all was said and done, gold lost well over 30 dollars while silver was down to the tune of . Platinum and palladium also finished the week in less than stellar fashion.
Jobs Data Handily Beats Market Expectations
Prior to this week even getting started, investors from the US and elsewhere were already labelling this week’s release of February’s employment data the most important data point of the month. The reasoning behind this, like it has been most other months, is that employment data is what the Fed is looking at very closely in order to determine if and when interest rate hikes will happen. As it stands now, most people are not expecting to see an interest rate hike until sometime next year, though that very well might change.
As for today’s employment data, investors and experts alike were expecting job growth in February to be somewhere in the neighborhood of 240,000. Most referred to these expectations as being a bit conservative, but with a handful of winter storms during the short month that February was, I would say that the expectations were spot on. To the surprise of most, however, the actual data showed job growth that was just shy of 300,000. Naturally, the USD was given a noticeable boost in the immediate wake of such upbeat jobs data. For precious metals, the better than expected data turned minor losses into massive downturns. Already sporting technically weak posture, precious metals are heading into the weekend really licking their wounds.
While today’s US employment data did beat expectations with regard to how many new jobs were created last month, wage growth is still falling behind. As you may or may not know, the Fed has, time and time again, pointed to wage growth as one of the key factors preventing interest rates from being raised. Basically, while it is good to see new jobs being added to the economy, it is discouraging to see that these jobs are paying less than expected. For long-term employees, wage growth has been dismal for quite some time now. As we head further into this year, I expect that wage growth will continue to be something that is very, very closely analyzed by the market.
Central Bank Battles Continue
As we look ahead to next week, it will be interesting to see what moves are made by global central banks. Each and every week we hear of yet another central bank making policy changes aimed at spurring economic growth, and the pace of these changes has really picked up. For gold and silver, all this moving around of global monetary policies is a good thing because it creates uncertainty across the global marketplace. For precious metals, uncertainty is what drives the market.
Wrap-Up
On the whole, this week was extremely poor for precious metals. Up until today, losses were not anything major, but as you can clearly see, things went downhill fairly quickly today. Hopefully, over the weekend, bargain-hunting buying will help spot values regain some of what was lost both today and this week. Unfortunately, however, next week’s light batch of data is making it look like metals have an even rougher road ahead.
