Gold and silver made strides forward on Friday thanks to some weaker than expected US employment data. On the whole, this past 5-day trading session worked out decently well for precious metals, which benefited from a slew of US economic data as well as election jitters ahead of next week’s US presidential election. Friday was, without a doubt, the most important day of the week seeing as that is when the non-farms job growth data was dealt. Other than that, the FOMC meeting and a few other pieces of US economic data took the attention of investors both in the US and abroad.
Jobs Data Just Misses Mark
Though it may not come as all that much of a surprise, the growth that US employment saw in October came back slightly weaker than most people were anticipating. Compared to expectations of 175,000 non-farm jobs being added, the actual data released by the US Labor Department showed that only about 171,000 jobs were added. Even though this was a clear miss to the downside, investors were mostly looking past it. The reason for this being that it is going to take much more than 1 slightly sub-par employment report for anyone to become convinced that interest rates are not going to be risen come the December FOMC meeting.
Today’s data should come as no surprise, especially considering that the ADP report missed the mark slightly as well. Even though the ADP report has little to no bearing on what the actual non-farms data will show, it did well to prove that October employment growth was anything but robust. All in all, both of these reports aided precious metals slightly.
Election Jitters Abound
For the first time in what is looking like this entire election process, we saw investors grow increasingly worried about what the outcome of next week’s presidential election will be. For the longest time, it was more or less written in stone that Hillary Clinton was going to win the general election and assume top position in Washington DC come January. A week ago, however, the FBI relaunched a probe into Hillary Clinton’s suspected use of classified information on her own, private server. Though it is unclear what the FBI’s end goal is, the fact of the matter is that people are not as sure that Clinton will be the out and out winner.
As a result, precious metals have benefited. This is so due to the basic belief that holds that while a Hillary Clinton presidency will breed more of the same in Washington, a Donald Trump victory would flip the establishment on its head. With all the uncertainty that comes along with Trump in office, people are seeking safe-haven precious metals to defend against what it, in truth, a good bit of uncertainty. This week saw both gold and silver benefit from worries regarding the election and is a major part of the reason spot values are able to eek out small weekly gains.
As we look ahead to next week, it is very clear to see what the main topic on everyone’s minds will be. The US presidential election will be taking place on Tuesday and, depending on the results, that is what the rest of the week will look like. Basically, for precious metals, a Hillary Clinton victory is not a good thing as it will basically cement in December interest rate hikes. On the other hand, a Trump victory might see precious metals gain significant ground for what is an extended period of time. There are a lot of question marks in the air right now, but we do know that most, if not all of them, will receive answers come this time next week.