Gold and silver are ending the week in poor fashion despite most factors seemingly in the favor of precious metals. In fact, just on Thursday the marketplace was dealt a particularly poor piece of data from the US employment sector. Other than that, the week was admittedly very slow and devoid of many developments.
Canadian Wildfire Sparks Oil Rally
When the week opened up, crude oil was on a rally of sorts thanks to a massive, raging fire that was burning across a large portion of Canada’s Alberta province. The fire was one of the biggest Canada has ever seen and is still burning as of the writing of this post, though its condition has become a bit less severe. Regardless, the first is also situated in such a way that it massively disrupted the flow and production of crude oil. In fact, at its peak, more than 1 million fewer barrels of oil were being produced on a daily basis. Thanks to the belief that the first would continue to worsen, and that oil production would all but cease, the spot value of crude oil did well through Monday and Tuesday.
That rally was quickly stopped come Wednesday, when things normalized a bit.
Weekly Jobless Claims Tick Upward
For the second week in a row, claims for unemployment benefits have ticked dramatically upward. This time, the number of claims received last week was more than 20,000 and brought the seasonally adjusted average up above the 290,000 threshold. As the average number of claims continue to rise, people are growing wary about what the future holds for the US economy. Beyond that, people are becoming concerned that perhaps raising interest rates was not the right idea, and that doing so again is something that will not happen anytime soon.
With that being said, there is an explanation for this week’s rise in claims, and that explanation is the weird laws governing unemployment benefits in the US. The particular law is one that allows non-teacher school employees the ability to file for unemployment benefits during a plan or unplanned break in school activities that lasts at least a week.
Being that the entirety of New York City Public schools were shut a few weeks ago for Spring Break, the claims that were filed then are just now being processed and tallied as part of the weekly claims report and seasonal average.
Being that so many employees were off from anywhere form 1 to 2 weeks, it makes sense why we are seeing such a drastic rise in the number of claims being filed. Most analysts were quick to point this out, and are quite certain that the tone of the weekly jobless claims will change come this time next week. With that being said, it will be interesting to see what happens if the tone of data does not change next Thursday.
As we look ahead to the week to come, the big piece of information investors will be waiting for is the next weekly jobless claims report. There is some serious concern being spread across the global marketplace that perhaps the US economy is not as strong as it appeared only a few months ago. Should next week see another upward tick in the number of new jobless claims, there is little doubt that the overall perception of the US economy will be flipped on its head.
Other than that, there really aren’t many ongoing geopolitical issues that investors are concerning themselves with. Instead, we are seeing concern strictly relating to the progress of global economic growth in places like China, Japan, the United States and Europe. As such, economic data from these regions will continue to be eyed very closely for the foreseeable future.