Posted on April 07, 2017
Gold Spot Price Open: $1,255
Gold Spot Price Close: $1,256
Change in Gold Spot Price: +$1
Silver Spot Price Open: $18.33
Silver Spot Price Close: $17.96
Change in Silver Spot Price: -$0.37
Precious metals ended the week having gained initially, but fell back to earth before the day was through. When all was said and done, gold added a single dollar while silver ended up losing in upwards of 40 cents. Platinum and palladium–as has been the story all week–finished slightly downward.
If you isolated Wednesday and Thursday’s employment data, this would have been an extremely upbeat week. If you add in Friday’s non-farms payrolls data, however, you will quickly see that things aren’t as bright as they seemed a few days ago. In fact, today’s data alone has done a lot in the way of unnerving investors who were confident not only in this week’s jobs data, but also that interest rates would be hiked again in June.
According to the Department of Labor, less than 100,000 non-farm jobs were added to the US economy during March. Officially, there were 98,000 new jobs created. When you consider that expectations were for at least 180,000 jobs to have been added to the economy, it is clear to see that today’s report was a major miss. In fact, this is one of the worst non-farm payrolls reports we have received in more than a year. To make a long story short, today’s massive miss on the part of jobs data put a major dent in interest rate expectations.
Just earlier this week we discussed how investors are slowly but surely pointing to the June FOMC meeting as the potential time for the next rate hike announcement, however that might be changing in a hurry. As you could have probably expected, gold and silver spot values perked up in the immediate wake of this data.
As for why the data was as bad as it was, most experts are pointing to the large snowstorm that affected much of the East Coast during the early parts of the month. This negatively affected the construction industry, but is estimated to have reduced the payrolls growth number by upwards of 100,000. Regardless, rate hike hawks were not at all pleased to see today’s data.
While the poor jobs data did well to lift precious metals spot values, that was not the only item providing support for metals. Reports on Thursday indicated that 2 US destroyers launched in upwards of 60 cruise missiles at a Syrian airbase which is said to be the source of a chemical attack that took place during the onset of the week.
This is the first time the US has directly became involved in the ongoing Syrian civil war. While any act of war tends to support safe-haven demand for metals, this act is of particular interest seeing as some folks see it as just the first of many future endeavors into Syria on the part of the US military. If, in the near-term, an increasing number of people become convinced that the US will become more heavily involved in Syria, you can expect that this will continue to support safe-haven buying.
Precious metals limped their way through the first parts of the week, however events during the final two days ended up giving spot values some nice underlying boosts. As we look ahead to next week, the economic data stream will continue as quarter-end data is dealt. For now, safe-haven demand is on the rise, and that much is keeping spot values for gold and silver in elevated positions. Whether or not this continues upon the beginning of next week remains to be seen, but things are looking up for the time being.