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    JM Bullion Gold and Silver Market Update (8/1/14)

    Gold Spot Price Open: $1,282

    Gold Spot Price Close: $1,294

    Change in Gold Spot Price: +$12

    Silver Spot Price Open: $20.47

    Silver Spot Price Close: $20.44

    Change in Silver Spot Price: -$0.03

    Precious metals ended the week posting mixed results, but ended the month of July in the red. When all was said and done, gold was able to gain more than ten dollars while silver ended up losing a few pennies. Platinum ended the day on Friday just marginally higher, but palladium traded down by more than ten dollars.

    Weak Jobs Data Pressures USD

    This week played host to a large quantity of US economic reports, but few were more heavily anticipated than today’s release of July’s employment data. If you can recall, the month of June saw the US economy add more than 295,000 jobs. As such, it was widely believed that July would create at least 230,000 jobs, if not more. Unfortunately, today’s data showed that the US economy actually created only 209,000 new jobs.

    While it is a good sign that job growth has exceeded 200,000 for yet another month, job growth falling short of expectations only lends credence to the Fed’s more cautious approach to raising interest rates. Mohamed El-Erian described the situation perfectly by saying, “It’s a Goldilocks report for an economy that is steadily expanding but not lifting off. It will reinforce for now the Federal Reserve’s commitment to a gradualist policy approach.”

    Market’s Focus Likely to Shift Going Forward

    By many people’s estimations, this week has yielded more US economic data than any other week this summer. Playing host to the latest FOMC meeting, US second-quarter GDP data, and July’s employment report, it is clear to see that this week was far busier than any in recent history. With that said, next week will be a good bit quieter than this week, and because of that, the focus of investors will be drawn to a number of situations that have been more or less ignored over the course of the past week and a half or so.

    Heading into next week, the quieter economic atmosphere will give investors impetus to pay closer attention to Argentine default, the breaking of the ceasefire in Gaza, and increasing violence between the Ukrainian military and pro-Russian rebels. After US equity markets declined rapidly during the last two days of the week, investors may feel the urge to hedge against risk via safe-haven, bargain precious metals. Of course, this is all speculation as there is no real way of determining how closely the market will follow the slew of ongoing, developing geopolitical situations.

    Fed Right On Track

    Despite the somewhat lackluster way in which this week was brought to an end, the belief that the Federal Reserve will raise interest rates from near zero sometime in the near future is growing. Even though today’s jobs data fell short of expectations, it is still an encouraging sign to see more than 200,000 jobs being added to the economy in a single month. President of the Federal Reserve bank of Dallas, Richard Fisher, sees the strengthening economy and rising inflation as two major reasons why higher interest rates might be imminent. Just today he was quoted as saying, “It would seem to me, and I have been arguing this, that the date of so-called liftoff has been moved forward.” He then went on to say that raised interest rates may come as early as sometime early next year.

    Wrap-Up

    As was mentioned earlier, next week will not be nearly as busy as the last 5 days have been. This will give investors a chance to really mull over the plethora of US economic data that was made public, as it will likely have some sort of impact on their investing decisions going forward. Apart from the continued analysis of the United States’ economic progress, however, there really isn’t all that much for investors to look forward to next week.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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