Despite today being the Independence Day holiday in the United States, traders from around the world are still in action. Precious metals are edging slightly higher but I and most market experts are expecting today to feature muted price movement. On the whole, this week was not one precious metals investors are going to remember fondly, but things could have definitely been worse. What little economic data made its way to the marketplace was mostly bearish for metals and weighed on spot values a bit. Still, both gold and silver are hanging on to control of the market and will continue to do so as long as investors are under the impression that interest rates in the US will remain low for the foreseeable future.
The market’s continued focus on the Iraqi civil war took a step backwards this week as fewer reports of violence hit major media outlets. While the marketplace is still very much concerned with the plethora of turmoil occurring in various parts of the Middle East, a lack of any noteworthy events saw their attention shift elsewhere during this week’s trading session. I do not think such will remain the case for entirely too long, however, as the civil war in Iraq is likely to get much worse before it gets any better.
US Employment Report Stuns Many Investors
As a result of this week being shortened for US investors due to the celebration of the July 4th holiday, the all-important jobs data from June was forced to be published a day earlier than usual. As is the case most times the US employment report is made public, this piece of data was the most highly anticipated of the week. On Wednesday, as a precursor of sorts, the ADP employment report was published and showed that more than 280,000 jobs were added in the United States in June. This number prompted the greenback to make some small gains, but everyone knows that the Labor Department’s non-farms data means a whole lot more than the ADP employment report.
Shattering expectations of between 212,000 and 215,000 new jobs being added to the economy in June, the non-farms figures showed that about 288,000 jobs were actually created last month. This news gave the US Dollar a significant boost and, in turn, weighed on spot values a bit. These jobs figures, in conjunction with profit-taking after recent gains, were enough to see gold and silver lose a good bit of value on Thursday. What’s more, yesterday’s Labor Department report saw the overall unemployment rate in the United States fall to 6.1%, the best such reading in about 6 years.
As we look ahead to next week, I expect investors to continue mulling over and reacting to yesterday’s data as most people did not get a chance to this week. There isn’t too much in the way of noteworthy economic data on the slate, so I also expect more attention to be paid to the civil war in Iraq as it is sure to develop further over the next few days.