Precious metals started out the week slowly but finished on a high note by gaining on both of the final two days of the trading week. All in all, however, both gold and silver seem to be stuck in a bit of a rut where they are unable to break out and make any sort of sustainable, lasting gains. This week did not offer a heavy dose of economic data, but there is a feeling that that much will change come next week.
Members of the Fed, as they usually do, voiced their opinion as it related to the eventual hiking of interest rates in the US, but the tone and content of their comments has not changed much at all.
Dudley Expresses the Need for Caution
New York Federal Reserve president William Dudley spoke on Friday and sounded a lot like Janet Yellen thanks to his remarks. In his comments, Dudley expressed the need for caution when it comes to hiking interest rates. Though he, like many others, agree that rates will be raised in the future, he does not feel any need to rush that course along.
Citing outside factors such as poor global economic growth and inflation levels that are not guaranteed to hit target levels, Dudley does not seem too keen on hiking rates this month nor next. This does well to reinforce the widespread belief that the only realistic time when rates might be raised is in June. Even then, the June date is nothing more than speculation and has very little basis in reality.
Jobless Claims Fall Back Below 270,000
After last week saw first-time claims for unemployment benefits rise by more than 10,000, this week saw that same figure fall by a similar margin. When all was said and done, first-time claims for unemployment benefits fell last week by more than 9,000, bringing the seasonally-adjusted average number of claims back below the 270,000 threshold.
This does well to prove to the world that even though the US and other economies may be struggling to some extent, the labor force is still strong. Perhaps bigger than any other takeaway from this data is the fact that weekly jobless claims have remained below the 300,000 mark for almost 60 consecutive weeks. This proves that the US economy is still hanging in there despite plenty of outside pressures.
Fed’s Minutes Force Dollar Downward
The US Dollar finished the week on a sour note thanks to the minutes from the Fed’s most recent meeting. Though the content of the minutes was about what most people had expected, it hurt the Dollar because it more or less solidified the belief that interest rates will be kept put for the next few months.
Just as Dudley did on Friday, the minutes showed that the Fed is going to proceed with caution when it comes to interest rate hikes. Sure, there is plenty of reason rates could be raised this month, but the fact of the matter is that there is no need to rush it. And that last sentence aptly sums up what the Fed’s minutes had to say. It will be interesting to see, especially next week, if any new, fresh pieces of economic data will change up the way people feel about when rates might be hiked next, though that seems highly unlikely. For now, we will be content to watch precious metals and see what kind of direction they open up next week heading in. Having posted gains on both of the last two days of the week, I am not so sure that the beginning of next week will be so kind to spot values.