Precious metals are looking like they will end the week on a positive note thanks to some poor US economic data that was made public earlier this morning. On the whole, this 5-day trading session has not been the busiest we have seen in recent history. The reason for this is due to the fact that the month of March and first quarter of 2015 were brought to a conclusion on Tuesday. With the end of the month and the quarter comes a whole heaping of economic data, so most investors were content to hold their positions until that data was made public today and into next week.
Looking ahead to the next 5-day trading session, you can bet that things will be a bit more active than they were this week. There will be a good quantity of economic reports for investors to mull over and they are sure to move precious metals spot values in one direction or another.
Iranian Nuclear Talks Reach Fruitful Conclusion
In the absence of markets-moving economic data during the first half of the week, the investing world shifted its attention to ongoing nuclear talks taking place in Switzerland. The talks, which have been ten years in the making, were put in action with the end goal being to determine what kind of nuclear capabilities the world felt comfortable allowing Iran to have. While the Iranian government has insisted time and time again that it is pursuing nuclear energy and only peaceful uses of nuclear power, the rest of the world has had a difficult time believing the large Middle Eastern country. When it comes down to it, most of the world flat-out doesn’t believe Iran and instead thinks the country is secretly trying to acquire nuclear weaponry.
Despite the fact that the talks were scheduled to conclude on Tuesday, they extended into Thursday because a deal was in the reach of negotiators. Finally, yesterday afternoon it was announced that Iran and 6 other nations have reached a preliminary nuclear agreement. Though the finalized agreement is not due until the end of June, yesterday’s agreement was a great step in the right direction.
For precious metals, this agreement was not such good news because it drove crude oil prices downward. The overriding belief currently is that if a nuclear deal is reached by the end of June, Iranian crude oil may hit the market for the first time in quite a few years. As it stands currently, most European countries have an embargo in place on crude oil from Iran. If Iranian oil is allowed onto the open market, an already glutted global supply will become that much more plentiful.
US Employment Data A Major Miss
For much of the week, investors have been anxiously awaiting the release of the latest employment data from the United States. All week long, investors have been touting this week’s employment report as being one of the most important of the year. The reason for this is due to the fact that the market is convinced that today’s employment report will tip the Fed’s hand on when they plan on raising interest rates.
Despite expectations for job growth somewhere in the neighborhood of 250,000, the actual figures released this morning showed that barely more than 125,000 new jobs were created in March. Making matters even worse is the fact that both February and January’s employment figures were revised downward.
For precious metals this was a good piece of data and helped drive spot values upward. As we look ahead to next week, I am sure we will open up the week with delayed reactions to today’s jobs report. Next week will also be full of economic data, so I am sure things will be a bit more active than they were this week.