Posted on November 06, 2015
Gold Spot Price Open: $1,109
Gold Spot Price Close: $1,091
Change in Gold Spot Price: -$18
Silver Spot Price Open: $15.11
Silver Spot Price Close: $14.81
Change in Silver Spot Price: -$0.30
To close out the week, precious metals declined for a fifth consecutive day thanks to employment data that handily beat the expectations of the market. By day’s end, gold lost close to 20 dollars while silver lost 30 cents. Both metals moved below key price points and are looking like they may move even lower than that. Platinum lost about ten dollars on the day, while palladium mostly moved sideways.
The most highly anticipated piece of US economic data was published today in the form of the Labor Department report on October employment growth. Being that the ADP employment report released earlier in the week slightly beat expectations, most investors were expecting a similar result today. Much to the surprise of almost everyone, the data showed that more than 270,000 new jobs were created during the month of October. For investors who want to see rates hiked before the end of the year, this was good news on two fronts.
For one, it ends a streak of 2 months where employment growth fell far short of expectations. If you can remember, both the employment data from August and September fell far short of expectations. Secondly, today’s data works to reinforce the belief that interest rates are going to be raised before the end of the year. As expected, today’s data gave the US Dollar an additional boost. Realistically, this whole week has been nothing but gains for the US Dollar, which in turn ended up weighing on the spot values of both gold and silver.
As we look ahead to next week, it is likely that investors from around the world will submit their delayed reactions to today’s data. That much will take up a good bit of the first parts of next week.
Chair of the St. Louis Federal Reserve James Bullard spoke today, saying that a stronger labor market and reduced financial stress are the perfect recipe for a December rate hike. In his comments, he said, “In October, the committee removed the key sentence citing global factors and suggested that the zero interest rate policy could be ended soon, depending on incoming data. The market-based probabilities of a near-term end to the zero interest rate policy have increased.”
The data he was referencing was, in part, today’s jobs data, which we now know was overly upbeat. Bullard’s comments play perfectly off of Yellen’s statement delivered earlier this week to the US House of Representatives. In her prepared remarks, Yellen left door wide open for interest rate hikes in December, but also stated that those hikes would be wholly dependent on the next month or so worth of US economic data.
Friday offered up a bit of excitement to spice up an otherwise dull week. Gold and silver head into the weekend reeling, and well below key price points. There is some hope that metals will bounce back over the weekend thanks to some bargain-hunting, but the way the market is currently shaping up that much does not seem very likely.
The US Dollar is in a perfect position at present and is only looking like it will get stronger. This is bad news for precious metals as current market conditions are really stacked up against them.