For yet another week, precious metals really ended up spinning their wheels and not doing much in the way of making any progress. The simple fact of the matter is that the way the current global marketplace is, it is always going to be difficult for gold and silver to make any substantial gains. Apart from continued speculation with regard to when interest rates in the US will finally be hiked again, there was some US economic data to contend with as well as yet another OPEC meeting. On the last day of the week, however, gold and silver pushed out gains and are, perhaps, about to see a total shift in momentum take place.
OPEC Cannot Seem to Agree on Production Cuts
Switzerland this week played host to another OPEC meeting aimed at trying to figure out what the global oil cartel can do to thwart what has been a very persistent supply glut. While over the past few weeks we have seen that supply-glut go away thanks to some extraneous outside factors, but as soon as those two items clear up the supply-glut will once again be forced front and center and will push crude oil’s spot value downward.
The goal of this week’s meeting was for OPEC nations to reach an agreement about cutting daily crude oil outputs in an effort to give the commodity’s value a boost. Of course, as the last few meetings have gone, there was no agreement on the part of OPEC member countries. As a result of this lack of agreeance we have seen the spot value of crude oil dip once more. For gold and silver this is not the worst thing in the world at the present moment in time, but it did not do much in the way of facilitating gains.
US Employment Data Comes Back Mostly Positive on Thursday, Negative on Friday
This week also played host to some US employment data. Both pieces of data were dealt on Thursday, and both were generally positive and upbeat. First was the weekly jobless claims report which indicated that last week’s first-time claims for unemployment benefits moved backwards by 1,000 from the week before it. This now brings the seasonally-adjusted average number of claims closer to 165,000, which is a number most investors feel comfortable with.
In other news, the payrolls processor ADP announced that private-sector job growth in May grew by more than expected. The ADP data is not always the most important in the eyes of investors, but any piece of news indicating that the US employment sector is doing good will surely give those who want to see interest rates hiked this month a confidence boost. Now all there is to do is await the upcoming FOMC meeting which is only a short while away. Should US economic data remain as upbeat as it has been recently there are few who doubt that interest rates will be raised before the end of the month.
On Friday, however, the US Labor Department released May’s non-farm payrolls growth report, and it showed particularly weak data. In fact, May put forth the weakest single-month job growth report we have seen in more than 5 years. Compared to expectations of more than 150,000 jobs being created last month, the data showed that fewer than 40,000 jobs were actually created. Despite this insanely poor figure, the overall unemployment rate dropped again. Still, with how poor today’s data was, there are a lot of investors who are second-guessing just how confident they are that interest rates will be risen before this month comes to an end. In a matter of hours, we saw the overall investing community go from confident that rates would be risen within two weeks, to now unsure of whether or not rates will be risen at all this whole summer. All in all, the next few weeks are going to be very interesting to analyze.