Precious metals managed to squeeze out weekly gains thanks to a continuation of safe-haven demand. The week, as a whole, did not bring about much in the way of economic data from the US or elsewhere, and as a result markets across the globe did not move too drastically.
One thing that was a focal point earlier in the week was Janet Yellen’s two-day testimony with regard to the US economy. During this 2-day tour of Capitol Hill, the Fed chairwoman spoke to members of the government about where the US economy stands now and what we can expect the future to hold. As usual, Yellen had a lot to say, and all of it was hawked over by investors.
Finally, President Donald Trump was, yet again, making headlines. The new President cannot seem to keep himself out of the news, and this is something that is doing well to underpin safe-haven demand as we trek forward.
Janet Yellen did well this week to keep her statements as vague as possible. To provide a little bit of background, investors the world over are currently interested in what the future holds for US monetary policy. At this juncture, most are convinced that 2017 will see the Federal Open Market Committee hike interest rates at least one more time. Some people, in fact, believe that rates will be raised up to 3 times this year. Despite being convinced that interest rate hikes are going to happen, no one is quite sure when they will happen and, on top of that, are unsure if President Trump is going to do anything to alter this expectation.
In her remarks this week, Yellen made it clear that the US economy is performing at a high level right now. Employment is the best it has been in years and, generally, things are looking up. With that said, she was quick to caution the FOMC on acting too quickly with regard to rate hikes. In the same breath, she was equally cautious about the prospect of the Fed waiting too long to hike rates. When the dust settled, investors were on the receiving end of almost no new information whatsoever. As a result, there wasn’t much of a noticeable reaction to Yellen’s commentary.
The US Department of Labor announced on Thursday that last week saw a 5,000 increase in the number of people filing for first-time unemployment benefits. This brought the seasonally-adjusted average up to 239,000. All things considered, this too was more of a non-factor than anything else for precious metals and most other markets. While the fact that jobless claims are rising is not a good thing, the increase we witnessed this week was quite small and did not unnerve anyone. So long as the seasonally-adjusted average number of claims stays well below the 300,000 mark, investors will more than likely remain content.
In addition to the jobs data, we were also on the receiving end of data that suggested this Spring is going to be big for construction projects. According to the Commerce Department, the number of building permits received in January was 6.5% more than the month before. This indicates that many parts of the US are going to see some big construction projects break ground come March and April. For the US economy, this is a very good sign and one that does well to reaffirm the belief that the economy is continuing to grow.
As we look ahead to next week and beyond, the focus for investors will remain on the things Donald Trump says and does. He was making headlines yet again this week for attacking members of the media and a scandal within his cabinet, so it will be intriguing to see what next week has in store.