Precious metals are still receiving plenty of support via safe-haven demand, however this week and its lack of fresh inputs saw gold and silver back down from highs realized last week. By week’s end, gold was positioned slightly lower than where it opened things up on Monday, but silver actually managed to add some value. In all, there was very little in the way of fresh economic data dealt.
Looking ahead to next week, the feeling is that things will be significantly more active than things were this week. The reason for this is due to the fact that we will be on the receiving end of some month end and quarter end economic data. For gold and silver, this will prove to be a pivotal week because, if the data is overly upbeat, the outlook on interest rate hikes might shift, and people might think that further rate hikes are coming sooner rather than later.
From the time markets opened on Monday, precious metals were receiving support from weaker global stocks and a particularly weak US Dollar. After last Friday failed to bring about any legislative action with regard to the repealing of the Affordable Care Act, the US Dollar took a bit of a hit. The reason for this is due to the fact that the GOP’s failure to initiate change is seen as a massive, early blow to President Trump’s ambitions.
Seeing as President Trump—in the immediate wake of his winning the election—was believed to be someone who would be good for business, his inability to enact change as it relates to healthcare hurt both stocks and the US Dollar.
Though stocks rebounded towards the end of the week to some degree thanks to gains from the financial sector, things got started at a fairly slow pace. The USD Index, which measures the greenback against a basket of rival currencies, also bounced back towards the end of the week. Both of these events help explain why gold and silver had a tough go of things at week’s end.
Even during weeks where there is seemingly no economic data to be had, we can always count on the weekly jobless claims report to cause at least some sort of stir across the global marketplace. According to the US Department of Labor, first-time claims for unemployment benefits fell by 3,000 last week from the week before. This brought the seasonally-adjusted average number of jobless claims back below the 260,000 threshold, to 258,000.
When all was said and done, this report did not actually end up having much of an impact on the precious metals market, nor stocks. Right now, investors are content with the US labor market. The general consensus is that employment is presently strong, and unless that changes reports like this will not have all that much of an impact on the marketplace.
A report released earlier in the week showed that US consumers are continually growing more confident in the US economy. According to the US Conference Board, the US Consumer Confidence index for March jumped up to 125.6. Considering the index offered a reading that was roughly 10 points worse in February, this report was a big deal.
In fact, stocks managed to move forward to some extent in the immediate wake of this report being dealt. That strength persisted through the end of the week and was a major contributing factor to how the rest of the week panned out.
As was mentioned before, investors are gearing up for a big week of economic data next week. Though it is impossible to say now how things will unfold over the first week of April trading, there are some people who think that gold and silver’s bullish run over the past 2+ weeks might finally be coming to an end.