Gold Spot Price Open: $1,129
Gold Spot Price Close: $1,118
Change in Gold Spot Price: -$11
Silver Spot Price Open: $14.71
Silver Spot Price Close: $14.61
Change in Silver Spot Price: -$0.10
Precious metals declined for yet another trading session on Wednesday thanks to some more upbeat economic data from the United States. When all was said and done, gold lost another ten dollars while silver fell by roughly ten cents. Platinum and palladium both finished the day lower by nearly ten dollars.
Private-Sector Jobs Data Impresses
Gold finished the day near a 2-week low thanks to some more impressive private-sector employment data from the United States. Thanks to this data, the greenback had an impressive day and this only added more pressure to gold and silver spot values. The payroll processor known as ADP released its reading on September private-sector employment growth and the reading came back better than expected. According to ADP, private-sector employers created roughly 200,000 jobs during the month of September compared to a downward revised August reading of 180,000 new private-sector jobs created. Economists expected that fewer than 200,000 jobs would be created so it is easy to see why today’s report was perceived as being overly positive.
In Europe, employment data was more of a miss than anything as the Eurozone’s overall unemployment rate remained unchanged between August and September. Though unemployment remained stagnant, it was noted that fewer jobs were created during September than what was originally expected. All in all, Europe is stagnating economically and beginning to feel the grip of a perceived global economic shutdown.
European Prices Fall as Deflation Concerns are Reignited
According to the European Central Bank, Eurozone consumer prices fell by .1% on an annualized basis during the month of September. This particular bit of data has sparked some renewed speculation with regard to the ECB expanding its Quantitative Easing-esque policy that has been put in place for the past few months. The €60 billion per month program is rumored to be on the verge of expansion as the Eurozone continues to struggle economically despite very easy money being abundant across the region.
ECB president Mario Draghi was recently quoted as saying that further monetary stimulus may not be out of the question. Confidence in the Eurozone economy has diminished greatly in recent months and without some actions being taken by the ECB the economy of the region may continue to struggle. The USD was given yet another boost today thanks to the Euro taking a hit after recent price data. Some people, however, do not think that one month of poor price data is enough to make the ECB act decisvely with regard to boosting the QE program. According to Bill Adams, of PNC Financial Services Group,”Despite the year-ago decline in headline inflation, this report does not meet the definition of deflation that Draghi has repeatedly cited this year – a self-perpetuating decline in prices that occurs across a wide range of goods and services.”
While the speculation has assuredly picked up, it is still not certain that the Eurozone will see an intensifying of their ongoing easy money policies.
Wrap-Up
Looking ahead, the rest of the week will see the focus of investors slowly but surely turn towards the release of the latest employment data from the United States. We haven’t talked all that much about the possibility of raised interest rates being the outcome of October’s FOMC meeting, but that is still what can be labelled as the primary concern for investors both in the US and elsewhere around the world. Even if rates aren’t raised, one cannot deny that the US economy is putting on an impressive performance in the midst of what many are calling a global economic slowdown.
