Precious metals spent a good majority of this week losing value, and are now sitting at multi-week lows. Thanks to a slew of different events that seemed to take place one after another, precious metals are now looking like they may fall below key psychological price points. Though it is still far too early to tell if the Fed is actually going to pull the trigger on a December hiking of interest rates, the marketplace seems to think they are thanks to some recent comments made by high-ranking members of the United States’ central bank.
Yellen Speaks to the House
Speaking to the House of Representatives earlier this week, Janet Yellen very much left the door open for interest rate hikes next month. Echoing the Fed statement delivered at the end of their October meeting, the Federal Reserve is by no means counting out hiking interest rates. Yellen maintained that the US economy is still performing well, even despite the recent global economic slowdown. In addition to that, she went on to say that employment in this country is also performing well. While the last few weeks’ worth of employment data begs to differ with Yellen’s sentiments, there is no denying that the employment situation in the US is better now than it was a few years ago.
When confronted about the possibility of raised rates derailing the recovering housing market, Yellen was quick to shoot that down. She explained that the Fed is planning on incrementally raising interest rates slowly over time, and that such a plan would not likely have adverse affects on the US housing market. The housing market has taken a bit of a dip in recent weeks, but all in all the desire to purchase homes is at highs we have not seen in years. In addition to that, now is the perfect time to buy depending on your situation.
Jobs Data Eyed
Perhaps the biggest economic news of the week came today in the form of the Labor Department’s reading on October employment growth. Before today’s report, however, ADP released their analysis of private-sector job growth for last month, and the numbers beat expectations.
Compared to expectations of roughly 180,000 new private-sector jobs being created last month, the actual figures beat expectations by 2,000. Though this is not the biggest of victories, it was encouraging for some to see upbeat jobs data for the first time in a few months.
Today’s data from the US Labor Department showed that the US economy added more than 270,000 jobs during the month of October. This number handily beat the expectations of the market and was encouraging for investors after both August and September brought back less than impressive employment data. As expected, precious metals declined by large margins as expectations regarding December rate hikes were only given more strength.
For gold and silver, the near-term future is not looking all that great. With interest rates more or less expected to be risen by the end of the year, it will be hard for metals to gain traction. Now sitting at multi-month lows, gold and silver are not looking like favorable investment options. As we head into next week, I imagine that the focus of the marketplace will remain on today’s data and what potential impacts it might have on interest rates being raised next month.