Precious metals got the week off to a rather slow start and were seen spinning their wheels more than anything else. That much continued through the middle parts of the week, even as economic data from the US and elsewhere was released. To be honest, the data that has been released this week did little in the way of moving markets at all. The only data points that investors really focused on were those relating to the US employment situation.
As we look ahead to next week, investors are already gearing up for a slew of quarter-end economic data from the US and elsewhere around the world. At the present moment in time, safe-haven demand for precious metals is fairly high, and by most accounts it very well might move even higher. For that reason, next week is poised to be a decent one for precious metals. How things actually end up panning out, however, remains to be seen.
Over the course of the past 5 years, chances are that you have at least heard about the civil war that has been raging in Syria. Since the dawn of this conflict there have been a lot of moving parts, and this has made the situation quite difficult to follow for most. Up until a few days ago, the one constant was that the US had avoided becoming directly involved in the fighting.
That all changed on Thursday when 2 US destroyers launched more than 50 cruise missiles at a Syrian regime airbase. The attack was in retaliation for supposed chemical attacks that were aimed at noncombatants. Though the attack itself was not large by US military standards, it marks the moment the US became directly involved in the Syrian civil war.
As is the case most times the US involves itself in foreign military conflicts, safe-haven demand for precious metals shot upward. That same safe-haven demand is being supported by the fact that investors quite simply do not know just how involved the US military will become in this conflict. That much is something that will be figured out over the course of the coming weeks and months, however investors are already beginning to assume that the US will be in this conflict for the long-haul.
Being that this was the first full week of April trading, investors geared up for a nice slate of US employment data. At first, things were looking to be upbeat. Not only did Wednesday’s ADP report show massive job growth in the private-sector, the weekly jobless claims report saw a sizeable reduction in the number of first-time claims for unemployment benefits.
Then, on Friday, everything changed. As you may or may not already know, out of all the US employment reports that can be dealt, few are more important than the non-farm payrolls growth report. This piece of data was released on the final day of the week and showed that only 98,000 new jobs were added to the economy during the month of March. This is not only one of the worst single-month employment growth reports we have seen in a year, it was almost 100,000 jobs shy of expectations.
Those with knowledge of the employment situation in the US are claiming that this figure came about as a result of a massive snowstorm that took place in March, but that has not stopped investors from beginning to worry about future rate hikes. Before this data was released, the general consensus was that June would see the Fed announce another round of rate hikes, but now that June data is being called into question. This is good for precious metals because it does well to undermine the interest rate hawks. As we open things up next week, not only will we be dealing with continued fallout from this report, we will begin canvassing quarter-end pieces of economic data.