Posted on November 07, 2014
Gold Spot Price Open: $1,145
Gold Spot Price Close: $1,178
Change in Gold Spot Price: +$33
Silver Spot Price Open: $15.46
Silver Spot Price Close: $15.78
Change in Silver Spot Price: +$0.32
Precious metals finished an otherwise unimpressive week in impressive fashion by regaining a solid chunk of the value that had been lost over the course of the past week or more. When all was said and done, gold picked up closer to 35 dollars while silver managed to pick up more than 30 cents. Platinum and palladium also finished the day upward, both by about $20.
In the lead-up to today’s release of October’s US employment data, there was a number of economic happenings for the market to pay attention to. Still, investors noted that, due to last month’s overly positive report on non-farms job growth, the expectations for October’s figures were going to be upbeat. On Wednesday, it was reported that most analysts were expecting to see at least 230,000 jobs added to the US economy last month.
Upon the release of the actual figures today, the market was mostly shocked to find that only about 214,000 new jobs were created last month. This figure fell far short of expectations and worked against both equities and the US Dollar. According to Lennon Sweeting, of USForex Inc., “It was a miss from expectations. The market was anticipating a higher reading but, from our perspective here, this is just a bump in the road and dollar strength is still intact.” Now, it will be interesting to see if the Dollar and stocks can rebound upon the opening of markets next week, or if the poor jobs data will continue to be felt.
The US Dollar, which has performed well this week, was pushed backwards ever so slightly on Friday due to the more downbeat employment report. Earlier in the week, however, the greenback was seen surging to its highest point in nearly 5 years. While the outlook on the Dollar is still strong going forward, today did offer a bit of a speed-bump.
Janet Yellen, Federal Reserve chairperson, spoke in Paris today, but her remarks were mostly neutral and offered very little insight into the future of monetary policy in the US. In her remarks, she commented, saying, “I continue to anticipate that the headwinds associated with the financial crisis will wane. As employment, economic activity, and inflation rates return to normal, monetary policy will eventually need to normalize too, although the speed and timing of this normalization will likely differ across countries based on differences in the pace of recovery in domestic conditions.” In all, Yellen’s remarks were none too different than those that she has been reiterating time and time again over the past few months.
Despite mimicking the Dollar’s upbeat performance for much of the week, US equities also ended the day and week moving downward. Despite the overall unemployment rate falling from 5.9% to 5.8%, equities, like the Dollar, were hurt by the fact that today’s figures didn’t quite live up to expectations. Still, most people are anticipating that stocks will bounce back sometime early next week.
All in all, this week was action-packed and offered a boatload of economic and geopolitical talking points. First, we had the midterm elections in the United States. These elections saw Republicans seize control of both the House and the Senate for the first time in quite a long time. This news was good for equities as well as the US Dollar and really was the impetus for the rally put on by the two aforementioned asset-classes.
Then, on Thursday, the European Central Bank met for their monthly policy meeting, and although the market was expecting to hear of a shift in monetary policy, such was not the case. All things considered, the ECB meeting was more of a non-factor than anything else. Finally, today brought about a somewhat weak employment report that ended up giving gold and silver a modest boost. Now, investors are wondering whether low prices and bargain-hunting buying will help precious metals regain some more ground over the weekend, or if things will go back to normal come early next week. “Back to normal” meaning, of course, a market where equities and the greenback are thriving.