Gold and silver fell off sharply on the last day of the week thanks to positive US jobs data and an improving US Dollar Index. While rising tension and violence in Egypt has done well to boost safe-haven demand for gold and silver this week, investors put much more weight on the jobs data out of the United States. With many Americans taking the day off on Friday, it will be interesting to see how badly gold and silver fare on Monday when trading opens again in full force.
Egyptian President Mohamed Morsi has been greeted this week by millions of his citizens pleading for him to leave his position as president. While not everyone wants Morsi to step down, there is a strong majority of people who feel this way. Since the beginning of this week gold and silver investors have been paying close attention to everything going on in Egypt because increased tensions and/or violence will undoubtedly help gold and silver fill the roles of safe-haven assets.
During the middle part of the week it was announced that even the Egyptian military and its leaders are calling for Morsi to step down, news that was received as quite the surprise. Despite this, Morsi defiantly remains in power even though the military is in the process of removing him. Now, pro-Morsi crowds, anti-Morsi crowds, and police forces have been clashing with increasing intensity that is causing the rest of the world to fixate their attention on the North African country. While this situation is escalating, safe-haven demand for gold has increased, but it was outdone by US economic data that was saved for the last day of this week.
Better Jobs Outlook
All week we have been anticipating the latest US jobs report as it always has some sort of impact on the precious metals marketplace. The jobs report was much better than expected as it was reported that non-farm jobs grew in June to the tune of 195,000. This was a much better improvement than the expected 160,000 rise in jobs.
While there were more non-farm jobs added than was expected, the overall unemployment rate in the United States remains fixated at 7.6%. This latest jobs report will undoubtedly fuel the flames of those who think the Fed should alter monetary policy in the coming months. This news also helped the US Dollar Index surge forward, which did a great job of hurting both gold and silver to finish the week.
All is not lost for precious metals, however, as the Egyptian debacle that we have been watching all week is only getting more and more violent. More violence means good things for gold and silver, as bad as that is to say.
Gold started the week at $1,235 and by closing time on Friday was sitting at about $1,221. This was a loss of $14.
Silver, on the other hand, started the week at $19.66 and by closing time on Friday was at $18.89. This was a loss of about 77 cents.
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