Gold Spot Price Open: $1,078
Gold Spot Price Close: $1,053
Change in Gold Spot Price: -$25
Silver Spot Price Open: $14.29
Silver Spot Price Close: $13.79
Change in Silver Spot Price: -$0.50
Precious metals immediately began the day on Thursday by moving downward by considerable margins. When all was said and done, gold lost more than twenty dollars while silver fell by almost 50 cents after gaining on Wednesday. Platinum and palladium both fell on the day as well, with platinum losing more than twenty dollars while palladium lost almost 15.
Weekly Jobless Claims Report Beats Expectations
On the back of the Fed’s decision on Wednesday to hike interest rates for the first time in more than 7 years, US employment data came back better than expected. Shortly after US markets opened on Thursday the Labor Department announced that 11,000 fewer people sought first-time unemployment benefits last week. Now, the seasonally adjusted average for unemployment benefits sits at a respectable 271,000. Considering expectations were for rates to fall between 270,000 and 276,000, today’s figures are falling right in line with expectations.
Further delving into the employment data, the four week moving average of weekly jobless claims was down by 250, to 270,500. Being that the four week moving average is seen as the most accurate and current view of the employment sector of the US economy, this data was welcomed with open arms by investors. All in all, recent data points indicate that employment in the US is growing at a nice rate.
This data coming on the back of the Fed’s decision to raise interest rates is something that is currently working against spot values. Now it will be interesting to see how far gold and silver will fall as market conditions do not look like they are going to improve for metals anytime soon.
Gold Demand Slides, Stocks Excel
Now that interest rates in the US have been risen, and are likely to continue rising through the extended future, demand for precious metals is moving lower and lower at every turn. Stocks in the US and many other parts of the world are surging in the wake of the Fed’s decision. From Turkey, to Russia, and everywhere in between, stock indexes were on the rise on Thursday.
With gold rapidly approaching the $1,000/ounce threshold, the question now becomes how long mines are able to continue producing. If the yellow metal’s spot value does continue to fall, mining companies may begin to feel the pain. The reason mines may face possible shutdowns is due to the fact that they will no longer be able to afford the labor that extracts metals from the mine. While mines may still be able to make money on the extracted gold, things such as facilities overheads and labor costs will end up putting most mines in the red. All in all, it will be interesting to see what happens over the course of the next few weeks.
Wrap-Up
All in all, Thursday went about exactly how we expected it to. Investors the world over seemed pleased with the Fed’s decision to raise interest rates seen in the positive moves forward made by major stock indexes. As we look forward to the final day of the week, it will be interesting to see what kind of price action gold and silver partake in. Popular opinion holds that both metals will more than likely continue to slide, but alas, anything can happen between now and week’s end.
