Gold Spot Price Open: $1,276
Gold Spot Price Close: $1,281
Change in Gold Spot Price: +$5
Silver Spot Price Open: $17.31
Silver Spot Price Close: $17.30
Change in Silver Spot Price: -$0.01
Precious metals were given some support early in the day on Thursday thanks to a continuation of the weak economic data stream from the United States. When all was said and done, gold managed to gain about 5 dollars while silver finished the day down a penny. Platinum and palladium echoed gold and silver by both performing quite well on Thursday too.
Weekly Jobless Claims Rise by More Than Expected
In case you missed it, Wednesday brought about a report from the payrolls processor ADP claiming that the private-sector of the US economy added many fewer jobs than expected in April. Compared to expectations of nearly 200,000 private-sector jobs being created last month, ADP reported that just over 160,000 jobs were actually added to the economy. Though the ADP report is not nearly as important as the Labor Department’s non-farms payrolls report, it is still taken into consideration by the wider investing world, and for good reason.
The employment data continued to stream in on Thursday thanks to the release of the latest weekly jobless claims report. Officially, first-time claims for unemployment benefits rose by more than 15,000 last week, bringing the seasonally-adjusted average number of claims back up above 270,000 to 274,000. Most were anticipating a rise in first-time claims, however those expectations did not call for the seasonally-adjusted average to move much higher than 265,000. As a result of this somewhat disappointing data gold and silver were given yet another safe-haven boost.
Now the attention of the marketplace is going to be firmly fixated upon the release of the non-farms payrolls growth report for April, which is due out sometime Friday afternoon. As it stands, expectations are for at least 200,000 new jobs to have been added to the US economy during the month of April, but after Wednesday and Thursday’s data points these expectations may be lowered a bit. For gold and silver, it is looking like the week might finally end with spot values trending upward.
Metals Bounce Back, Trump’s Nomination Considered
After faltering a bit the last few days, Thursday’s weak employment report solidified gold and silver’s move upward. Something we haven’t really discussed up to this point is what the upcoming US presidential election, and the candidates that are still standing, might mean for the future prospects of precious metals.
The reason we haven’t discussed this is due to the fact that, up until a few days ago, party candidates were not as much of a sure thing as they are now. The Democratic candidates are still battling it out, but Republicans have but one candidate left standing—Donald Trump. If Trump becomes the next President of the US, people are beginning to wonder where he stands on the current state of the economy and monetary policy in general.
The first thing that must be made clear is that Trump is a proponent, to some extent, of the low rate policies that the Fed has instituted in recent years. Despite him saying that he would look to install new people in leadership positions at the Fed, he has positively touted the work of Fed Chair Janet Yellen. Further proving Trump’s support for low rates is his known stance on what a more expensive Dollar might mean for the US economy. Simply put, a more expensive US Dollar may threaten the growth prospects of the economy as other countries may be unable to afford increasingly expensive US goods. We are seeing that a little bit now ever since interest rates were given a boost. As other economies in parts of the world such as Europe and Asia struggle, more expensive US goods will simply be overlooked for cheaper alternatives. If interest rates are continually boosted despite the existence of weak global economies, US products will have a tough time being sold in foreign markets.
Even though interest rates are gradually heading upward at the present moment, a Trump presidency may see that much be flipped on its head. This prospect alone is good for precious metals as a weaker Dollar almost always means stronger spot values. Still, we are a far ways away from the presidential election and it is far too early to say one person is going to be a shoe-in for the presidency.
Wrap-Up
Heading into the final day of the week it goes without saying that the non-farms payrolls report is the biggest item investors are paying attention to. It will be interesting to see how this report shapes up too, because the first two doses of US employment data dealt this week were anything but positive.
