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    JM Bullion Gold and Silver Market Update (9/5/14)

    Posted on September 05, 2014


    Gold Spot Price Open: $1,267

    Gold Spot Price Close: $1,269

    Change in Gold Spot Price: +$2

    Silver Spot Price Open: $19.16

    Silver Spot Price Close: $19.26

    Change in Silver Spot Price: +$0.10

    Precious metals were able to stop their slide today due to the release of some sub-par employment data from the United States. When all was said and done, gold ended up picking up about two dollars while silver gained close to ten cents. Platinum and palladium also trended ever so slightly upward to close out the shortened week.

    Non-Farm Payrolls Come Back Weaker Than Anticipated

    Apart from yesterday’s European Central Bank meeting, the release of the United States’ non-farms payrolls data from August was the most intriguing event of this week. The reason for this is due to the simple fact that a prevailing belief held by investors the world over is that improvement on the part of the US labor situation will mean interest rates in the US are raised sooner rather than later. This belief isn’t based on nothing either, as Janet Yellen and other members of the Fed have reiterated that while the US economy is improving, there is still a lot more room for improvement.

    Shortly after US markets opened today, the non-farm payrolls data was published and ended up falling far short of somewhat lofty expectations. Despite a Bloomberg survey of experts forecasting job creation somewhere in the neighborhood of 220,000, the actual figures showed that only a little more than 140,000 non-farm jobs were created last month. This news had an almost instantaneous negative impact on US equity markets as well as the US Dollar, and was a major part of the reason precious metals were able to put an end to their downward slide.

    More than just aiding spot values, today’s data might also cause a larger portion of investors to become convinced that the Fed will not raise interest rates as soon originally anticipated. Chris Gaffney, market strategist at EverBank Welath Management, made sense of what today’s data by saying, “Previous data had suggested the economy was gaining traction, but today’s number is a bit of a disappointment, and the Fed may have to maintain lower interest rates. This is a good number for gold.” In recent months, the growing belief that interest rates will soon be raised has reduced demand for gold as a tool to fight off inflation.

    US Economy Still On Right Path

    While it may be a bit discouraging to see today’s sub-par employment report, the US economy is still very much on a strong path to recovery and has shown considerable signs of growth throughout much of this summer and especially in recent weeks. Instead of focusing on how many jobs were created, many experts are pointing towards yesterday’s ISM service-sector index report as a reason why all is not lost for the US economy.

    The service-sector index was reported yesterday by the ISM as being near 60. Though this number may mean nothing to you, yesterday’s reading marked the first time since before the Great Recession of 2008 that the index was at such a high level. Why is this so important? Well, the US economy is very much service-oriented, so to simply judge things based off of how many jobs were created would be an errant way of determining the overall strength of the US economic system.


    Despite this week being shortened due to the observance of the Labor Day holiday on Monday, there was a lot of economic data and activity for investors to digest. Next week will bring its fair share of economic activity as well, but will likely be a good bit more subdued than this week.

    All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.