Precious metals spent most of this week trending downward as stocks across the world found renwed strength. Adding to the pressure facing metals was a Dollar that began picking up steam towards week’s end. All told, the week did not present metals with much support at all.
After seeing the last 5 days unfold, the future is not looking so certain for gold and silver. While only a week ago, the abounding uncertainty had people thinking that perhaps metals would be on the up and up for some time, things seem to have calmed down in a blink of an eye. In all reality, the overriding belief is that Donald Trump not doing much to stir the pot through his first full week as president is something that, quite frankly, surprised a lot of folks. What’s more, it has given investors renewed confidence and that is shown in the Dow’s great performance this week.
US Economic Data Less Than Stellar
Though stocks did well in the US for most of the week, you wouldn’t know that from looking at the economic data alone. To be honest, it was quite dreary on this front. First there was the new home sales figures for this past December, which showed a monthly drop of 10.4% in the number of new homes sold. This is quite a drastic drop and does well to paint a not so pretty picture of the US housing market, which was believed to be quite strong.
In addition to this, there was the weekly jobless claims report. According to the US Department of Labor, last week saw 22,000 more people file for unemployment benefits than did the week before. This brought the seasonally-adjusted average number of jobless claims well above the 260,000 mark. Considering that expectations were for the seasonally-adjusted average to remain below 250,000, it is easy to see why this news is disappointing to so many. With all of that being said, the 4-week moving average of jobless claims ticked downward, so the news was not all bad.
Palladium’s Worst Day in a Decade
The middle of this week saw people talking a lot about palladium; something that does not happen all that often. The reason for this was due to a massive dip in the metal’s price. In one single day, palladium shed more than $50/ounce. While this, on the surface, might be shocking news to a lot of folks, it really is explainable. Since the beginning of December palladium has been on an almost non-stop upward streak. After hitting its ceiling, the metal topped out and investors began cashing in on massive gains made over a relatively short period of time.
Even with the massive loss, the metal is still trading higher now than it was a month ago. In fact, it is still trading what many would say is significantly higher.
Trump Optimism Pushes Stocks
Being that President Donald Trump did not start any wars or make any massive changes during his first week as President of the United States, investors grew a bit more confident. Their confidence showed through the performance of equity markets all week long. The Dow Jones Industrial Average hit an all-time high during the latter parts of the week, and rode that wave into the weekend.
What will be interesting to see is whether or not all of this Trump optimism will continue to carry on or not. So long as the President continues touting his business acumen, investors are going to grow in confidence that he is, in fact, the right man to boost this economy to heights never realized before.