Precious metals have spent most of this week on the decline as the market goes back and forth on what it thinks about potential interest rate hikes. While gains happened on a few days, those were almost always outdone, and most often only a day later. Gold and silver are in a bit of a state of limbo at present, with some investors thinking that volatile market conditions make investing in precious metals appropriate, while others see soon-to-be rising interest rates as a reason to stay away from both gold and silver.
As we head further into the month of September, the focus of the marketplace will be on the upcoming FOMC meeting, which has been on the minds of investors for months now. Ever since the start of the summer, investors and market experts have been pointing to September’s FOMC meeting as the likely time when interest rates would be raised. Though a lot has happened in recent history to alter that belief to some extent, there is still a lot of people who are expecting to hear a raised interest rates announcement come September 16th/17th.
US Jobs Data Disappoints
On Friday, the US Labor Department released its non-farms payrolls report for the month of August. Earlier in the week, investors were a bit unnerved to find that the ADP report on private sector job growth came back mightily disappointing. Though that report almost never has a direct bearing on the Labor Department’s jobs data, this time around it did. Today, the report from the Labor Department indicated that just fewer than 175,000 new jobs were added to the economy during the month of August.
Considering expectations were for job additions of 220,000 or more, it is clear to see how this data is being perceived as disappointing. Now, the fact that jobs data was less than encouraging, investors are once again expressing concerns over whether or not the Fed will be able to raise interest rates. Now, the investing world is going to turn its attention to the FOMC meeting that is scheduled to take place roughly two weeks from now. The speculation is raging and the market is split between some people thinking that interest rates will be risen this month while others think that they will be risen a few months from now.
China’s Stock Markets Weighing on the Rest of the World
This week once again saw the market focus on what is happening, or not happening, in the Chinese economy. We received some PMI information which indicated that the Chinese manufacturing sector is experiencing some contraction. It has been no secret that the Chinese economy has been under pressure recently, and now the world is beginning to take notice. Just this week, China’s main stock index fell by more than 1% and brought global stock markets with them. With so much uncertainty surrounding the Chinese economy, it is unclear what to expect going forward. Thanks to this uncertainty, many investors believe that it will be difficult for the Fed to pull the trigger on raising interest rates this month.
Looking ahead to the next two weeks, you can expect that the market will continue to place its undivided attention on any and all US economic data. The Iran nuclear deal, and all that it may bring with it, is another thing that will be paid attention to over the next few weeks as well. It will be interesting to see if and when Iranian crude oil is allowed on Western markets, because it is likely to be happening sometime soon.