Posted on August 05, 2015
Gold Spot Price Open: $1,094
Gold Spot Price Close: $1,088
Change in Gold Spot Price: -$6
Silver Spot Price Open: $14.68
Silver Spot Price Close: $14.66
Change in Silver Spot Price: -$0.02
Precious metals continued to spin their respective wheels on Wednesday as released economic data from the United States only served to further hurt spot values. When all was said and done today, gold lost another 6 dollars while silver fell to the tune of a few pennies. Platinum and palladium sported small losses of about 4 dollars apiece.
According to data released by the Institute for Supply Management, the US services sector expanded in July at its fastest pace in more than a decade. Being that services account for a majority of the US economy, this data only served to strengthen the belief that interest rates are going to be hiked by this September. Today’s data combined with comments from the Atlanta Fed’s Dennis Lockhart on Tuesday have the market fully convinced that interest rates will be hiked this September. Being that Lockhart is one of the members of the Fed who has a vote in monetary policy decisions, his comments on Tuesday mean a lot to investors in the United States.
As you could have probably guessed, today’s US economic data gave the Dollar a boost–a boost it needed after performing below expectations to kick off the first part of the week. According to Richard Franulovich of Westpac Banking Corporation, “The direction of the ISM number is very encouraging for the dollar, although the number might be exaggerating the underlying strength of the U.S. economy.” With the eyes of the world now turning to this Friday’s non-farms payrolls data, it will be interesting to see if jobs data reinforces the belief that the US economy is performing extremely well, or if it will detract from that line of thought.
According to ADP, private-sector companies added less than 200,000 jobs during the month of July, the worst such reading since early Spring. Officially, it was reported that only 185,000 private-sector jobs were created during July, which is a far cry from the 225,000+ jobs that were reported as being created during June. Even though experts were only expecting a modest creation of private-sector jobs, anything under 200,000 is cause for concern.
The numbers overall were fairly disappointing, but by sector the job growth recorded during July was steady, with growth occurring in all sectors of the economy. While today’s ADP data may lead investors to believe that this week’s non-farm payrolls data will also come back weaker, it is important to remember that the ADP report is not always a good indicator of what the non-farms payrolls report might show. For this reason, many investors are still keeping up hopes that Friday’s data will be in line with other bits of recent economic data. In addition to the numbers being dealt on Friday, investors are also going to be paying close attention to any and all information regarding wage growth, or lack thereof.
As has been the case thus far this week, things across the global marketplace have been generally quiet. We have been on the receiving end of a good bit of economic data from the US, most of which has been upbeat. With that being said, however, all of these reports are more or less meaningless should Friday’s Labor Department report fall as far short of expectations as today’s ADP report did. For gold and silver, no matter the outcome of Friday’s data release, it is still looking like substantial, lasting gains are going to be difficult to come by in the near future.