Posted on January 04, 2016
Gold Spot Price Open: $1,068
Gold Spot Price Close: $1,077
Change in Gold Spot Price: +$9
Silver Spot Price Open: $13.96
Silver Spot Price Close: $13.94
Change in Silver Spot Price: -$0.02
Precious metals began the first full week of 2016 trading by flirting with small gains. When all was said and done, gold managed to gain about 10 dollars while silver was left more or less unchanged by day’s end, down by a few pennies. Platinum and palladium on the other hand both lost value to kick off the week.
Reacting to poor manufacturing data from China, most European markets kicked off trading on Monday by moving sharply lower. It was reported that China’s manufacturing data continued to contract during the last month of 2015 and ended the year having made very little progress. Growth expectations for China were quite lofty before the year began, and those expectations were not nearly lived up to when the dust settled.
In other news on Monday, crude oil prices ticked upward thanks to Saudi Arabia’s decision to cut diplomatic ties with Iran. For those who are unaware, Saudi Arabia’s embassy in Tehran was attacked in response to the Saudi-sanctioned execution of a leading Shiite cleric. The religious man was executed after being convicted of treason after he chose to voice his opinion about the royal family. In Saudi Arabia, simply speaking out against the country’s leaders is grounds for execution. Now, with the two OPEC nations no longer seeing eye to eye, there is a fear that the supply of oil coming from the Middle East will be disrupted. Going forward, it will be interesting to see what kind of impact Iran and Saudi Arabia’s differences will have on the crude oil market.
Thanks to the aforementioned diplomatic complications in the Middle East, precious metals are seeing safe-haven demand push spot values upward, at least for now. Now the challenge becomes, as it always is, whether or not gold and silver can sustain these gains or perhaps even build upon them through the rest of the week.
There is a boatload of economic data that will be released over the course of this week and the following week, and that will have major ramifications for the global marketplace and precious metals. The data will be especially important due to the fact that year-end data is viewed as more important than most monthly data.
Of all the data points that are being made public over the coming days and weeks, few pieces of data are more important than December’s report on job growth. If the report shows healthy job growth during the last month of the year, we may be looking at 2014 and 2015 as the best two years of job growth since the late 1990s. According to preliminary forecasts, expectations are for there to have been 204,000 new jobs added to the economy last month. Some forecasts for job growth hold that more than 220,000 jobs were created last month. Even with the slow job growth recorded during the summer, it is expected that more than 2.5 million jobs were created during 2015, making this past year the second-best year for job growth since the turn of the 21st century. The best year for job growth was during 2014, when more than 3 million jobs were created.
For gold and silver, however, the fact that jobs data is expected to be wholly upbeat is something that stands to threaten gains made today.
Gold and silver started off the week and year in impressive fashion, but that does not mean we should get our hopes up for the rest of the week. With the plethora of economic data that is due out this week, not gains made by gold and silver are safe.