The first week of 2017 trading, though fragmented, ended up being a wholly positive one for both gold and silver. As expected, there was a good bit of economic data dealt this week, most of which was from the United States. Apart from this, a major theme across the global marketplace was a renewed interest in precious metals. Right from the start of the New Year, bargain-hunting buyers were out in full force, driving spot values upward. In fact, precious metals made gains every day of the week apart from Friday.
As we look ahead to next week, the economic data stream is going to pick up even more. This time, however, we are going to be on the receiving end of more year-end economic data rather than data from December alone.
US Employment Report Dealt
Though there was a good bit of economic data to be had this week, most of it fell under the umbrella of employment data. An important piece of data came in the form of the weekly jobless claims repot. If you can recall, the data dealt 2 weeks ago was somewhat shocking because so many first-time claims for unemployment benefits were filed that the seasonally-adjusted average number of claims closed in on 300,000. This was a big deal simply because we are approaching 100 consecutive weeks where this number was well below the 300,000 threshold.
Much to the surprise of investors and market watchers, this week’s data showed that last week saw 28,000 fewer first-time claims than the week before. This brought the seasonally-adjusted average number of claims to a reasonable 235,000. What is more impressive than the data itself is the fact that, somehow, precious metals managed to weather the storm and continue along their winning ways.
On Friday, the employment data continued, this time in the form of the non-farm payrolls data from the month of December. Economists and experts were anticipating that about 175,000 non-farm jobs were added to the economy last month, however the actual data showed fewer than that. A little more than 150,000 jobs were added to the economy last month. On its face, this might seem like something that might work in favor of precious metals, but in reality gold and silver lost to close the week out. The reason for this is due to the fact that November’s employment growth was revised upward from a little more than 170,000 jobs created to 204,000. This is a massive upward revision and one that did well to offset the slight miss that was December’s jobs data.
As for what all this means for the grand scheme of things, we can safely say that this batch of employment data very much favors the monetary policy hawks who would like to see interest rates hiked sooner rather than later, and at least three times during 2017. The Fed has alluded that they would like to continue hiking rates gradually, but have also made it very clear that this is something that will happen only if economic conditions permit.
There were other pieces of economic data dealt this week, but most of them were overlooked. The major themes were the gains made by precious metals as well as the fact that the US Dollar backed off of highs we have not seen in quite some time. After rally since more or less the beginning of November, it should come as no surprise that the greenback is succumbing to a bit of a corrective pullback. This is also happening, to some extent, across global equity markets which have been on a similarly impressive run since November. Heading into next week, if these two markets continue to cool off, precious metals may have room to move even further forward. Regardless, this was a great way for gold and silver to start off the New Year.
This market update is provided weekly with analysis. You can always check the gold and silver price today by watching our on-site charts.