Gold and silver were down yet again this Friday, though only slightly. After today’s November employment report beat market expectations investors the world over were expecting to see gold and silver take a large dip in value, but such was not the case. Thanks to more bargain-hunting buying by those who feel gold and silver have reached the bottom of their respective markets precious metals were able to avert total disaster on the last day of the first full week of December.
As we look ahead to the coming weeks, the upcoming FOMC policy meeting will be of utmost importance to investors. After having this weekend to digest the last five days’ economic data, we will have much clearer picture with regard to what the marketplace thinks about precious metals. Currently, the diminishing risk-averse attitude is being blamed for gold and silver losing a lot of value over the past few weeks. Barring any major shifts in economic data out of the US over the coming few weeks, gold and silver will likely continue to be at the whim of the same market bears who have been in control since the latter stages of November.
Friday’s Economic Data
In the lead-up to this week it was no secret that investors had to prepare themselves for a large offering of economic data. Among these pieces of economic data were the Federal Reserve’s beige book, the ADP employment report, a US GDP report, and a few others. Overshadowing all other economic data this week, however, was the employment report for this past November.
While the marketplace was expecting to see non-farm payrolls rise to the tune of about 175,000 or so, the actual figures blew market expectations out of the water. The Labor Department’s official statistics showed that 204,000 non-farm payrolls were added to the US economy in November. This news initially caused gold to sink to a new 5-month low, but that move was quickly counteracted by the large number of bargain-hunters who subsequently made their way to the market.
As we move into next week, the final week before December’s FOMC meeting, investors the world over will be speculating with regard to the exact timing of Quantitative Easing tapering. While a strong contingent of investors believe that the tapering of QE will be announced at this month’s meeting, more investors are looking to the upcoming January, February, and possible even March FOMC meetings as potential times when QE will be tapered.