Precious metals ended the week posting impressive gains thanks to yet another weak batch of employment data. All in all, this week was not overly positive for gold and silver but the way things ended will have investors happy. Right now, there is a growing incidence of risk aversion and we are seeing more and more investors flock to precious metals.
It will be interesting to see, once markets open up next week, just how gold and silver fare.
Jobs Data Galore This Week
There was a lot of economic data dealt this week, but jobs data dominated that slate. First up was the ADP private-sector jobs report from the month of April. While no one was anticipating a large quantity of private sector jobs to have been added last month, the actual figures came up short of admittedly lower-end expectations. Officially, the payrolls processor ADP announced that little over 160,000 new private-sector jobs were created last month. Compared to expectations of nearly 200,000 jobs being added, it is easy to see why this data was viewed as being disappointing. Still, even though the ADP report was disappointing, most investors overlook this report because the non-farms data is typically more important than the ADP report.
On Thursday, the marketplace was dealt another piece of employment data in the form of the weekly jobless claims report. Much to the surprise of many, it was reported that first-time claims for unemployment benefits rose by more than 15,000 last week. Now, the seasonally-adjusted average number of claims rose back above 270,000 despite consensus expectations claiming that claims would not move above 260,000.
As if the week’s employment data could not get any worse, the Labor Department’s non-farms payrolls report mimicked the ADP report earlier in the week. Officially, only about 160,000 non-farm jobs were added in April compared to expectations that more than 200,000 jobs would be added.
What this data really does is put an end to expectations that the Fed will raise interest rates anytime in the near future. Not only is the Fed not expected to raise rates in May, it is seeming highly unlikely that they will make that move in June either.
Trump Seals Republican Nomination
The biggest news story of the week as far as US politics are concerned is that Donald Trump locked up the Republican nomination for president. After both John Kasich and Ted Cruz announced that they would be suspending their respective campaigns.
With that happening now Donald Trump stands alone as the only Republican presidential candidate. Now that we know this, it is important to talk about what a Trump presidency might mean for gold and silver. While it is hard to say for sure what this might mean, we do know that Trump is a proponent of lower interest rates, especially in the midst of current economic times. This is good for gold and silver because low interest rates mean a weaker USD, and whenever the greenback is being pushed downward gold and silver tend to benefit.
Apart from his insistence on interest rates remaining low, it is difficult to say for sure what Trump might do to the economy if he is elected.
All in all, this past 5-day trading session was quite eventful from an economic standpoint and ended up proving to be wholly positive for precious metals. Now, having gained a good bit of momentum, both gold and silver are going to be looking to open up next week making gains. There is not a lot of economic data expected to be dealt next week, so it will be interesting what direction gold and silver head in.