Gold Spot Price Open: $1,316
Gold Spot Price Close: $1,328
Change in Gold Spot Price: +$12
Silver Spot Price Open: $18.91
Silver Spot Price Close: $19.43
Change in Silver Spot Price: +$0.52
Though there were plenty of other topics to discuss this week, few were more important than today’s non-farms report from the month of August. When all was said and done on Friday, gold managed to gain about 12 dollars while silver gained a little more than 50 cents. Platinum and palladium also ticked upward on the day, with both metals finishing roughly 15 dollars higher than where they began the day.
US Non-Farms Data Finally Dealt
Unless you have been living under a rock recently, you are fully aware that this week was all about employment data. On Wednesday, we were given an ADP private-sector jobs growth report that bested expectations and raised hopes that today’s report would be upbeat as well. A day later, the weekly jobless claims data was dealt and that, too, gave us some hope that today’s report would be upbeat.
Unfortunately, by the time the Labor Department dealt their report this morning, all hopes were dashed. No one was really expecting August to emit the most robust employment growth data, but even these low expectations were not lived up to. Officially, consensus expectations were for roughly 180,000 non-farm jobs to have been added to the US economy last month. The data, however, showed that barely more than 150,000 jobs were added. Though this is not the biggest miss we have witnessed, it does well to put a psychological damper on hopes for interest rate hikes sooner rather than later.
As you might have expected, the fact that the data came back weaker than expected ended up pushing US stocks lower while simultaneously giving a much-needed boost. The biggest mover was silver, which managed to gain about 30 cents and eclipse the $19/ounce mark once more. The fact of the matter is that while an upbeat employment report was not going to do much to convince people that interest rates would be hiked anytime soon, a poor report like we were actually dealt was always going to dash hopes for interest rate hikes. This may not make much sense, but the fact is that a weak report hurts rate hike expectations far more than a strong report helps it. With an FOMC meeting only a short while away, it will be interesting to see what the future holds for interest rates and investors opinions of them.
Stronger US Dollar Hurting Manufacturing
If you can remember back to a few days ago, you likely remember the weak reading on manufacturing in the United States. Though it has been no secret, the manufacturing sector is lagging behind in more ways than one.
One of the biggest reasons why the manufacturing sector is doing so poorly is due to the stronger US Dollar. A stronger Dollar means that US-produced goods are more expensive for foreign buyers, and this all translates into a manufacturing sector that is not doing so well. There is no surefire remedy for this, at least none that has been brought to the table, but until the manufacturing sector is operating at a higher level, the case for interest rate hikes is not going to be so strong.
Wrap-Up
Gold and silver did end the week on a positive note, but weekly gains were nothing to write home about. Fortunately, these small gains might have been enough to provide a bit of a psychological to investors and might encourage more gains to be made. After the Labor Day holiday, we will officially be out of the summer doldrums and, thus, market activity is supposed to pick up. It will be interesting to see if this actually happens, however.
