After losses suffered on the final day of the week, it is looking as though precious metals will finish at, or slightly below, where they began the week. On the whole, there wasn’t all that much economic data dealt, but the fact of the matter is that investors have been much less concerned with economic data, and much more concerned with what the Fed has to say about interest rates.
While it is true that the former definitely has an impact on the latter, there was a lot of Fed speak this week and that always catches the attention of investors. Not only did Fed Chair Janet Yellen address members of the government, the president of Chicago’s Federal Reserve, Charles Evans, also had some things to say about how he feels about interest rates.
This Week in the Fed
Janet Yellen kicked off this week’s batch of Fed speak by commenting on her beliefs with regard to what should be done to interest rates, and when. Her tone was not so supportive of quicker hikes, and this much surprised the investing world, especially after other members of the Fed commented on their intentions to see rates raised at least two more times this year. Yellen’s comments were hawked over by investors everywhere and resulted in a weaker Dollar. This gave gold and silver a bit of a temporary boost during the middle parts of the week, but those small gains could not at all be sustained.
A few days after Yellen took center stage, Charles Evans, who controls the Chicago Federal Reserve, came out and said that he expected interest rates to be hiked at least an additional two times this year. Citing great employment figures, a growing economy, and a host of other factors, he envisions very few scenarios where rates are not raised at least twice. With all that said, it is important to remember that Evans is in no way, shape, or form part of the voting body of the Federal Reserve, the FOMC.
Now we stand confused as ever with regard to when rate hikes will actually take place. There are some people who think they are coming in April, others in May, some others still in June, and then those folks who are sticking to the belief that rates are going to remain at current levels for the foreseeable future. There are a lot of uncertainties floating around, but one thing we do know for certain is that this month’s FOMC meeting is going to be extremely important.
Plethora of Jobs Data Dealt
In the mid-week, the payroll processor ADP announced that the US economy added more than 200,000 new private-sector jobs to the economy during March. This figure is ok, but kind of fell short of what the market was expecting. Still, with that being said, the ADP report very rarely has any sort of direct influence on the report we are given by the Labor Department, so you will not see investors read too heavily into this number.
On Thursday, the market was told that weekly jobless claims rose last week by more than 10,000, bringing the seasonally-adjusted average well back over the 270,000 threshold.
On Friday, the all-important non-farms payrolls data was dealt and showed that the US economy created roughly 215,000 new jobs in March. This beats somewhat modest expectations of a rise of about 205,000, but was perceived as positive news nonetheless. The Dollar was given a boost in the wake of the report, as too was the thought that perhaps interest rates are not going to stay grounded in April or May.