Precious metals finished the week moving slightly higher on Friday to put a positive spin on an otherwise negligible 5-day trading session. While Friday itself was a rather lackluster day, the week as a whole brought about some interesting talking points. One that really sticks out is the upbeat weekly jobless claims report that was dealt on Thursday.
This week and likely next week as well will play host to plenty of Q1 economic data from the US and elsewhere around the world. Though no one is expecting any real robust growth coming from North American nor European economies, people will be paying attention nonetheless.
Jobless Claims Dip Strongly
If you can recall, last week brought about a weekly jobless claims report that saw first time claims for unemployment benefits surge forward by more than 10,000. Not only was this a generally disappointing piece of news, it also drove the seasonally-adjusted average number of claims up above the 270,000 mark—a threshold that has been very important to investors in recent months.
Thanks to last week’s unexpected and large rise, the attention of the marketplace was quickly placed on what this week’s weekly jobless claims report might say. Perhaps none too surprisingly, it was announced that first-time claims for unemployment benefits fell by just shy of 10,000, bringing the seasonally-adjusted average back below that 270,000 threshold. What’s more, the fact that jobless claims once again came in under 300,000 means that this week marks the 57th consecutive such week where this was the case.
All in all, the jobs data does well to reassure investors that even though the US economy may be struggling a bit, the job sector is still powering through.
Fed Minutes Hurt US Dollar
The minutes from the Fed’s most recent meeting were made public this week and had a good bit to say about interest rate hikes and when they might happen. Though there was no real clear-cut consensus, it seems as though most members of the Fed agree that we will be waiting until at least June until rates are raised again.
Citing some of the same factors as before—slow global economic growth being a major one—the Fed simply does not feel as though the time is right for rates to be raised. This not only hurt the Dollar, it more or less eliminated the small contingent of investors who were convinced that rate hikes might even be coming in the wake of this month’s meeting.
As we look ahead to the weeks to come, one big event will be the meeting of some major oil-producing nations so that they can talk about what to do about the ongoing supply-glut. As it stands, there are really very few solid answers that have been provided aimed at providing a solution for the oil crisis. While crude oil’s spot value did tick up temporarily this week on news that US reserves were down by larger margins than expected, the overall trend for the commodity has been in the downward direction. Even if crude oil-producing nations are able to cut supplies and halt production for a period of time, the overriding belief is that a hungry Iran will step in and fill the void, thus keeping the supply-glut in place.
As we look ahead to next week, expect more economic news from the first quarter of 2016. Across the board at first glance it does not seem to be the most enticing quarter for global growth, but there may be a few surprises thrown into the mix when the data is finally made public. This is especially true when we talk about data from the United States.