Despite fading towards the end of the week, precious metals still managed to make the first full week of February trading a success. On the whole, this past 5-day trading session did not offer up much in the way of fresh economic data. Instead, we saw investors focus on many of the same things they have for the past few weeks; namely, US President Donald Trump.
In other news, there was some discussion regarding upcoming elections in France. At the present moment, the polls are being led by a right-wing nationalist, Marine Le Pen, who is being likened to President Trump. Though this situation is still unfolding, it is creating some safe-haven demand for gold and silver because Le Pen has vowed to remove France from the EU in similar fashion to the United Kingdom. All things considered, this will be an interesting situation to watch.
To make what can be a very long story quite short, you can rest-assured that President Trump helped create a lot of safe-haven demand for precious metals. The biggest and continuing headline is that of President Trump’s travel ban, which came about by way of a January 27th Executive Order. The Order mandated that anyone holding a passport from Sudan, Syria, Yemen, Libya, Somalia, Iran, and Iraq be barred from entering (or reentering) the US for at least 120 days. The ban on Syrian passports was set to be indefinite.
After the Order was signed, an immense number of protests broke out across the country. Before long, an Appeals Court judge from Washington ruled that the ban was Unconstitutional, and further ruled that it be lifted. This situation has gone on as President Trump attempts to get the ban reinstated. As a result of this messy, complicated situation, we have been seeing a lot of safe-haven demand. In general, the uncertainty surrounding President Trump’s words and actions is doing well to unnerve investors the world over.
Another incident that happened this week is what is being viewed as an attack by the President of the United States on a private business. President Trump, earlier in the week, tweeted his outrage at the fact that Nordstrom had pulled his daughter Ivanka’s fashion line from their stores. Even more people are outraged at the fact that the President seems to be fine with talking derogatorily about a business. There hasn’t been many fresh developments in this situation, but yet again it is doing well to support the growing, persistent level of safe-haven demand for both gold and silver.
One of the biggest stories of the week was also a mostly overlooked one. On Thursday, the US Department of Labor announced that first-time claims for unemployment benefits fell by 12,000 last week, bringing the new total seasonally-adjusted average number of claims to 234,000. This is not only the lowest tally in more than 40 years, it also marks 101 consecutive weeks where the seasonally-adjusted average has remained below 300,000.
While this should work against precious metals, the data was mostly ignored when the dust settled. This might be due, in part, to the fact that St. Louis Federal Reserve president James Bullard made it clear that he is not necessarily expecting to see a boatload of rate hikes this year. Bullard pointed to a host of factors as to why the Fed will likely remain content keeping rates at their current .5%-.75% range. Amongst those factors was, of course, the uncertainty of what the future holds with regard to President Trump and the decisions he makes.