Gold Spot Price Open: $1,311
Gold Spot Price Close: $1,317
Change in Gold Spot Price: +$6
Silver Spot Price Open: $18.68
Silver Spot Price Close: $18.89
Change in Silver Spot Price: +$0.21
Despite the positive US economic data we have received this week, precious metals were able to battle back on Wednesday and post some decent gains. When all was said and done, gold managed to pick back up about 6 dollars while silver tacked on in upwards of 20 cents. Platinum and palladium, on the other hand, ended up losing close to 10 dollars apiece.
US Manufacturing Sector a Spot of Weakness
Throughout the first half of this week and over the course of the past few months in general, US economic data has been mostly upbeat. Today, however, some manufacturing data was released and painted a somewhat bleak picture of this struggling sector of the US economy.
According to data from the Institute for Supply Management, the United States PMI for August fell below 50 to a reading of 49.4. For some perspective, the same reading in July was up above 52. For those who may not know what these figures mean, all you need to know is that an index reading beneath the 50 mark suggests that the economic sector in question is experiencing, or on the verge of experiencing, contraction.
With US and global investors extremely sensitive to US economic data at present, it should come as almost no surprise that today’s PMI caused stocks in the US and Europe to fall. In that same breath, today’s data ended up giving gold and silver a boost, mostly thanks to an uptick in safe-haven demand as some investors prepare for the worst as it relates to Friday’s non-farms payrolls data. Solaris Asset Management’s Tim Ghriskey commented on what today’s data might mean for the wider economic picture by saying that “both the lower oil prices and the ISM show weakness in the economy.
here’s fear that there’s adisconnect between what the Fed might do and what the data is showing us.” To simplify this a bit, he is saying that while the Fed continues to reiterate that rate hikes might be coming in the near future, economic data does not necessarily support any sort of hike. Now, the attention of the market turns to the US Department of Labor non-farm payrolls growth report from August. This particular report is currently expected to be mostly upbeat and complement that last few months’ worth of weekly jobless claims data and other upbeat employment reports. With that said, there are growing fears that tomorrow’s data may not live up to expectations.
Weekly Jobless Claims Data Dealt
Being that this week is full of employment data, it only makes sense that the weekly jobless claims report was one of the most discussed topics of the day. Unfortunately, today’s data showed that the seasonally-adjusted average number of claims rose from 261,000 to 263,000 as 2,000 fresh first-time unemployment claims were filed last week. Though this data may not seem all that strong, estimates were once again for the seasonally-adjusted average to reach or exceed the 265,000 threshold.
The even bigger takeaway from today’s data is that this is one more consecutive week during which the average number of jobless claims fell below the 300,000 mark. To be more specific, this is the 78th week where claims fell below this threshold. Though people want to have some idea of what they can expect form tomorrow’s non-farms data, the fact of the matter is that the weekly jobless claims report has very little to do with this.
Wrap-Up
I think it goes without saying that the number one concern for investors tomorrow will be the non-farms data. There are few other major reports expected to be dealt, and seeing as the non-farms data is arguably the most important data point of the month, all eyes will be on what the Department of Labor has to say. Should the data fall short of admittedly lofty expectations, gold and silver may be able to finish out the week strongly.
