Gold and silver spent most of the first full week of January trading making gains thanks to some fresh geopolitical news that is causing concern amongst investors around the world. From an economic data standpoint, this week was fairly slow, but there were some key employment reports due out that caused investors both in the US and abroad to question what lies ahead during the month of January. In fact, next week is more than likely going to bring about a good bit of economic data from the end of the year as well as from December alone. Year-end data is especially important because it gives investors a very clear view of how a given economy performed during the year.
Geopolitical Actions Drive Marketplace
To start out the week, it was geopolitical events that were driving the direction of the marketplace. First up was a story centering on Saudi Arabia pulling all of its diplomats from Iran after recent developments. In addition to this, Saudi Arabia also announced that they would be officially cutting ties with Iran after angry Iranian citizens stormed the Saudi embassy and lit it on fire. The reasoning behind these angry demonstrations are in response to Saudi Arabia putting to death a leading Shiite cleric for speaking out against the Saudi ruling family.
As we move forward, it will be interesting to see what happens between Saudi Arabia and Iran as there are very strong beliefs that this could turn into something more than a war of words. Of course, gold and silver made some gains, but this happens almost anytime there is conflict in the Middle East.
Then, later on in the week, it was announced that North Korea apparently test-dropped a hydrogen bomb. Though Western intelligence sources have disputed the legitimacy of North Korea’s claims, the world took this news as though the test-drop was a real thing. Gold and silver also improved in response to North Korea’s apparent tests due to investors generally being worried that the communist nation is up to no good. It is early in the year, but we will be keeping a close eye on both of these stories as the year progresses.
Jobs Data Improves to End the Year
Though there was not an overload of economic data released this past week, some jobs data trickled to the surface and caused investors to pay attention. First was the ADP private-sector job growth report that was released Wednesday afternoon. This piece of data showed that the US private-sector created a very healthy number of jobs in December. Though this number was potentially skewed due to a year-end accounting quirk, it was healthy job growth nonetheless
On Friday, the Department of Labor released their non-farm payrolls data from the last month of the year. The data came back far better than expectations and showed that nearly 300,000 non-farm jobs were created during the final month of the year. Considering expectations were for roughly 200,000 jobs to have been added to the US economy, it is clear to see why market watchers were so ecstatic to receive today’s figures.. Now, we can reflect on 2015 as being the second-best year for job growth in the past decade.
Looking forward to next week, there are a good bit of economic data points that investors are going to have to contend with. Year-end economic data is especially important, and will be hawked over by investors both at home and abroad. In addition, regular December monthly economic data will be released at every turn throughout the whole of next week. For now, however, gold and silver spot values are reflecting on a positive week, the likes of which we have not seen for quite some time.