Posted on January 14, 2016
Gold Spot Price Open: $1,093
Gold Spot Price Close: $1,081
Change in Gold Spot Price: -$12
Silver Spot Price Open: $14.25
Silver Spot Price Close: $13.91
Change in Silver Spot Price: -$0.34
For yet another day this week gold and silver are moving downward as market conditions remain stacked against the precious metals market. When all was said and done, gold lost more than ten dollars while silver moved downward by more than 30 cents. Platinum and palladium finished the day mixed, as platinum moved downward by $10 and palladium managed to gain about 7 or 8 dollars.
The Federal Reserve’s Beige Book was released on Thursday and showed that the US economy expanded for much of the past 2 months. From November through December, the job market exhibited strength that we have not seen in quite some time. Of the 12 Federal Reserve districts, 2 reported moderate growth, 7 experienced modest growth, and Boston’s growth was described as upbeat. Finally, the Kansas City district was the only one that showed somewhat poor results, saying that growth was essentially flat.
The Beige Book described the past 6 weeks’ worth of growth by saying, “Labor markets continued to improve, with employment increases evident in reports from seven districts. Districts reported little overall change in wage and price pressures, with wage increases running from flat to moderate, while price increases tended to be minimal.”
While it is somewhat upsetting to see wage growth remain mostly flat, it is nice to see that employment across the United States seems to be improving in unison. Today’s data worked against gold and silver and powered the greenback to put forth a decent performance. In all, today’s Beige Book and accompanying report only work to lend more credence to the belief that the Federal Reserve will, in fact, pursue further rate increases as the year progresses.
Apart from the Beige Book release, investors also had the weekly jobless claims report to contend with. According to the US Labor Department, weekly claims for first-time unemployment benefits rose last week by 7,000, moving the seasonally adjusted average up to 284,000.
Expectations were for the average to be closer to the 275,000 mark, but today’s data is not being viewed as a major miss. Though the Department of Labor did not cite any specific reason for the increase in claims, I am thinking that as retailers rid themselves of seasonal positions, an increased number of claims can be expected over the course of the coming weeks.
With that being said, the US job market is still incredibly strong and only seems to be gaining strength with each passing month. For gold and silver, this is not such good news as economic strength in the US will drive more of a fervent risk-appetite rather than the opposite. At present, demand for precious metals is in a trough and continuing to fall as the US economy continues to emit upbeat reports.
Looking forward to the last day of the week, there is not anything overly pressing that investors have their attention on. China is still a major concern for investors, though I do not expect that to change anytime soon. What’s more, most people are beginning to factor in Chinese weakness to investing decisions, meaning that poor data from China from here on out may not have as large of an impact as it has up to this point.
Iran will soon be in the spotlight once more as we are just a few weeks away from the possible lifting of Western-imposed sanctions. If that does take place, expectations are that the crude oil market may be dealt another blow. Though there is not much to focus on for Friday, the upcoming weeks seem as though they will be busy with activity.