For yet another week, it is looking like precious metals are going to finish the 5-day trading session having posted losses. Each day this week has seen metals lose just a little bit of value, and though losses, per day, were nothing major, they snowballed enough to make this a week worth forgetting from a spot values standpoint. Making matters even worse is the poor technical posture of gold and silver, as bears slowly but surely take over the marketplace.
The big news of the week came today in the form of the most recent employment data from the United States for the month of February. All US employment data is important to investors, but after the first few months of 2015 have painted a pretty bleak picture of the US employment situation, there should be no wondering why investors are putting so much weight into today’s figures.
Finally, another theme this week was the further altering of monetary policies by global central banks. Both China and India made changes to their respective policies earlier in the week in hopes of spurring more economic activity and growth.
Monetary Policies Remain In Flux
A theme that I do not think will be going away anytime soon is that of central banks altering monetary policy in order to help spur stagnating economies. Most recently it was China’s central bank that was the subject of shifting monetary policy. Announced over last weekend, China’s central bank made the decision to slash interest and deposit rates. Trying to spur economic growth, this decision by China’s central bank more or less falls in line with that of many other global central banks. As the year moves on, I anticipate that we will see plenty more moves just like this made by the various central banks of the world.
In addition to slashing interest and deposit rates, China also announced that it would ease up on restrictions related to business loans. Making it easier for businesses to get money is yet another tactic by China’s central bank to encourage spending. Following all of this data was an announcement by China’s PM saying that GDP growth expectations for the year were reduced from 7.5% to a flat 7%. Despite this downward correction, expected growth in China is far superior to that of other countries, especially those across Europe.
US Employment Data Makes A Splash
Prior to this week kicking off, investors were already anxiously awaiting the release of the latest employment report from February from the United States. Thanks to employment data in the US being less than stellar through the first month and a half or so of the New Year, investors were looking towards February’s figures as a defining bit of data.
Prior to the data’s release, investors were anticipating that about 240,000 new jobs were created during February. Though this is more of a conservative growth estimate, it is important to keep in mind that numbers were likely negatively affected by the fact that February is such a short month and also because of the amount of horrible weather that much of the country has had to deal with.
Officially, more than 290,000 jobs were added last month, so it is safe to say that the employment figures handily bested expectations. As you could have probably guessed, metals did not take too kindly to this news and ended up suffering considerable losses on Friday. When we open things up next Monday, it will be interesting to see if metals can bounce back, or if spot values are going to continue venturing further downward.