Gold and silver were looking like they would end the week sitting on massive gains, but the upbeat employment data was piled on towards the end of the week and weighed on spot values. It wasn’t just employment data that was dealt this week, as plenty of month-end economic data from January streamed in as well.
As we have come to expect at this point, President Donald Trump spent most of the week making headline after headline. The majority of these headlines revolved around a recently imposed immigration ban aimed at people trying to enter the United States from Libya, Syria, Iraq, Iran, Yemen, Sudan, and Somalia. This decision has been the source of a lot of unrest, most of which played into the hands of metals. It goes without saying that safe-haven demand is currently fairly elevated.
A huge theme of the week was the releasing of a boatload of economic data from the United States. First up was the private-sector employment data from the payrolls processor ADP. Though expectations were for only a little more than 200,000 jobs to have been added to the economy, the actual data showed that more than 240,000 jobs were added to the private-sector. This news was far better than expectations but did not have that much of an impact on the global marketplace.
On Thursday, we were dealt the weekly jobless claims report which was equally impressive. According to the Department of Labor, last week saw 14,000 fewer first-time claims for unemployment benefits from the month before. This brought the seasonally-adjusted average down to the 240,000 range. To put this data into perspective, expectations were for the seasonally-adjusted average to reach up to 250,000 and beyond.
Finally, today brought about the non-farms payrolls data from the US. Though expectations had called for about 175,000 new jobs to have been created last month, the actual data showed that more than 225,000 jobs were added. As you might expect, this did not help precious metals all that much. With that much being said, the employment report went on to show that wages grew at an incredibly slow pace last month. Despite hourly wage growth increase expectations of .3%, the data showed that wages moved upward by only .1%. So, while this data does give people reason to believe that the Fed is still planning on hiking rates, it also shows that perhaps the Fed should avoid rushing these further rate hikes.
This week was dominated by President Trump’s recent decision to ban immigrants from 7 countries, all of which are predominately Muslim. The ban has been labeled as discriminatory and un-American and has been responded to with protests all over the country and the world.
Despite all of this mounting pressure, President Trump has stuck to his guns and plans on keeping the ban in place. The ban and resulting unrest has brought about a lot of safe-haven demand. Throughout the whole of his campaign, Trump’s actions were viewed as wildly unpredictable, and he is proving to be exactly the same now that he is sitting in the Oval Office.
As we move forward into the month of February, you can bet your bottom dollar that Donald Trump will remain in the headlines. Just Thursday he commented on Iran’s recent missile testing and alluded that he is willing to take military action if these seeming provocations continue. On camera, he talked about the situation and said that “nothing is off the table.”
This situation will be closely monitored going forward. Then again, there is very little change we will ever reach a point in time where Donald Trump strays too far from the front pages of major publications.