For gold and silver, the week that has just passed was yet another that investors would like to completely forget. Put simply, there was not much delivered this week that lent itself to boosted spot values. In fact, most of the data that was dealt worked contrary to metals’ growth prospects.
The early parts of the week were more lackluster than anything else, but the final few days of the week had investors thinking that we were not in the middle of the Summer Doldrums. Jobless claims data, a central bankers meeting, and some downwardly revised US economic data were just few of the things investors were left to digest.
Yellen Leaves Door Open for Rate Hikes
A highly anticipated speech from Janet Yellen was delivered on Friday morning, and what she had to say surprised investors to some extent.
Naturally, the biggest aspect of her speech related to what she had to say about the strength of the economy as well as what the future holds for interest rate hikes. To the surprise of many, Yellen said, in so many words, that the current strength of the labor market and the future outlook for economic growth through the end of the year are such that rate hikes in the relatively near-term future are not out of the question.
Earlier this week, we received word that the chances for a rate in December are listed at just over 40%. It will be interesting to see what, if anything, Yellen’s remarks did to those chances.
Weekly Jobless Claims Fall Again
Despite expectations that called for the opposite to happen, weekly jobless claims once again moved downward. According to the US Department of Labor, first-time claims for unemployment benefits filed last week came back 1,000 fewer than the week before. What this really means is that the seasonally-adjusted average number of claims has fallen to 261,000. Perhaps even more impressive is the fact that we are edging in on 80 consecutive weeks where jobless claims have stayed below the 300,000 mark. This is the best such streak since the 1970s, however back then the labor market was much smaller and thus staying under 300,000 was much easier.
All in all, this piece of data does little more than affirm the widespread belief that the labor market is improving constantly. Naturally, this lends itself to those who would like to see interest rates hiked before the year is through.
US Q2 GDP Revised Downward
The last piece of noteworthy data came in the form of the United States’ Q2 GDP, which was revised downward by one tenth of one percent. Though the downward revision itself is nothing major, the effect it has on the minds of investors is. Even though we are hearing central bank officials tell us the economy is doing just fine, reports and revisions like this seem to paint a different picture.
For gold and silver, the contradictory nature of data the past few days means that spot values have more or less treaded water; not moving too far forward nor falling by considerable margins. With next week, I would not anticipate that there will be a plethora of data points for investors to discuss. With that being said, the following week should see the general level of activity pick up across the global marketplace as people wrap up summer vacations.
Come the end of September, the overarching hope is that we will have a better idea of what the future holds for interest rates in the US. With that said, I am not holding out hope that anymore information will be delivered. At least not any information that can be too heavily relied upon.