Gold and silver spent this whole 5-day trading session making gains thanks to economic turmoil and uncertainty that continues to abound across the global economy. Do not look now, but we are now on a 2-week streak of impressive performances by both gold and silver. At this current point in time, there are so many economies that are struggling that it is difficult to highlight just one. This week was highlighted by a fairly large-sized batch of US economic data, most of which was not so upbeat.
Beginning on Wednesday and extending through the end of the week, there was a plethora of jobs data from the month of January from the United States. First up was the ADP private-sector jobs report, and it did not offer overly poor nor overly upbeat readings on private-sector job growth last month. Officially, ADP reported that a little more than 200,000 private-sector jobs were created during the month of January. Perhaps the only overtly positive thing that can be taken from this week’s ADP data was that December’s private-sector employment growth was upwardly revised to show gains of more than 265,000.
A day later, on Thursday, the US was dealt the Labor Department’s reading on weekly jobless claims. The data showed that 8,000 more people filed for first-time unemployment claims last week than the week before. This was not good news, and even worse was the fact that the 4-week moving average of jobless claims moved up by 2,000. This is important because the 4-week moving average is often seen as a more accurate view of the US employment sector at one specific point in time.
Finally, Friday brought about the Labor Department’s reading on non-farms job growth and this data fell short of expectations by a good bit. Officially, expectations were for job growth of about 190,000, but the actual figures showed growth of just over 150,000. While this piece of news was not good, the overall unemployment rate was reduced to 4.9%. For gold and silver, this did not hurt the momentum gained this week and may help things get started back up again on Monday.
The Institute for Supply Management announced this week that their reading on non-manufacturing growth was lower in January than it was in December by what some might consider to be large margins. Officially, January’s reading came in at a bit more than 53% compared to a reading of more than 56% a month before. Being that these figures are above 50%, the data in and of itself is positive, but the decline is concerning. The US economy is mostly based on services, so for this figure to decline at all is not a good sign.
As we look ahead to next week, investors the world over will be interested to see if precious metals can retain the momentum they have established over the last few weeks. For this to occur, metals are relying on market conditions remaining much the same as they have been since the beginning of the year. If the price of crude oil remains low, and stock markets continue to be as volatile as they have been, gold and silver are looking at market conditions that are somewhat favorable at present.
There are some market experts who feel as though gold may see some resistance as it approaches $1,200/ounce, but that much remains to be seen. For now, investors can reflect on a few consecutive weeks of gains; something we haven’t seen in quite some time.