Gold Spot Price Open: $1,213
Gold Spot Price Close: $1,211
Change in Gold Spot Price: -$2
Silver Spot Price Open: $15.98
Silver Spot Price Close: $15.96
Change in Silver Spot Price: -$0.02
Precious metals were able to regain a little bit of ground on Thursday thanks to crude oil losing value, but by day’s end those small gains turned red. When all was said and done, gold lost a few dollars while silver lost about 2 cents. Platinum and palladium were not as fortunate, however, because both metals lost in upwards of 15 dollars.
US Employment Data Better Than Expected
Despite the rest of the week not bringing about much in the way of markets-moving economic data, Thursday offered a bit of a different story. First and foremost, the private-sector jobs growth report from May was dealt. According to the payrolls processor ADP, the US private-sector created more than 170,000 jobs during the month of May. Officially, ADP claimed that 173,000 new private jobs were created, which beat the original estimate of 165,000. Additionally, it beat April’s private-sector job growth figure of 166,000. All in all, employment data from the United States has been consistently upbeat over the course of the last few weeks.
The weekly jobless claims report came back and showed that 1,000 fewer jobless claims were reported last week than the week before. Officially, the seasonally-adjusted moving average for jobless claims has moved down to 267,000. This is being perceived as good news because, so long as jobless claims stay below 270,000, the overall outlook on employment will remain positive.
As for the larger picture, today’s upbeat employment data works to reinforce the belief that interest rates will, in fact, be raised before the end of the month. With the FOMC meeting only a few weeks away, you can bet that interest rate talk and speculation will pick up considerably. While everyone knows that interest rates are likely to be risen in the near future, now investors would like to know how drastic a rate hike will occur. This is something that will be speculated upon heavily over the course of the upcoming weeks.
OPEC Once Again Leaves Daily Outputs Untouched
Crude oil took another tumble on Thursday as investors received news that OPEC, for yet another time, would be leaving daily production tallies untouched. Despite a supply-glut that has been present in the marketplace for the better part of this year and extending back as far as 2015, the oil cartel cannot seem to come to an agreement with regard to what should be done in order to augment consistently falling crude oil spot values. Time and time again nations have met to discuss the possibility of cutting daily output, but time and time again this conversation has yielded nothing in the way of tangible solutions to the supply-glut problem. Fortunately for crude, the last few weeks have seen a temporary disruption in the global supply give spot values a bit of respite. In general, however, the supply-glut and related downward trend on the part of crude oil is still a very real occurrence that investors will have to contend with now and into the future.
Timothy Evans, an analyst for Citi Energy, talked about the outcome, or lack thereof, from this most recent OPEC meeting by saying, “The outcome of today’s OPEC summit was the same as in December, without even a nominal step in the direction of a coordinated output policy. This leaves open at least the possibility that total OPEC production will walk higher over the next few months, postponing the much anticipated rebalancing of the global petroleum market.” In shortr, Evans, like many other analysts, is making it clear that something needs to be done about daily output or the value of crude oil may not make a marked recovery anytime soon.
Wrap-Up
As far as economic data is concerned, today offered up quite a bit. What this really did, though, is boost the likelihood that interest rates will be raised before this month comes to an end. So long as this continues to be the case, precious metals are, like we saw today and for most of this week, going to have a tough time venturing too far forward.
