After beginning the day trending downward, precious metals finished the day and week having made very small gains. This whole week was littered with economic activity and data, but these past two days have been the most active of the four-day week. Yesterday brought about the European Central Bank’s most recent policy meeting while today yielded investors the most recent non-farm payrolls data from the United States.
The attention of investors also shifted to the crisis in Ukraine this week, but it ended up not having too much of an impact on the spot values of precious metals. There was talk of a ceasefire agreement being reached between Russia, Ukraine, and pro-Russian rebels, but it was later found out that no such agreement was ever reached. As a result, the violence throughout much of the Eastern half of Ukraine continues to rage on.
ECB Announces Rate Cuts, US Employment Data Disappoints
Though there was a good amount of economic data made public this week, activity on Thursday and Friday caught the attention of investors more than anything else. Yesterday before US markets opened, it was announced that the European Central Bank would be reducing the EU’s refinancing rate to an all-time record low of 0.05%. Not only that, but ECB president Mario Draghi also laid out the framework for a new monetary policy that very closely resembles Quantitative Easing.
As you could have probably guessed, this news prompted the US Dollar to make impressive strides forward against the Euro currency. In fact, most experts are expecting the Euro to continue declining against the strengthening greenback.
Today, the marketplace shifted its attention to the United States and the non-farm payrolls report that was set to be made public. Despite preliminary expectations holding that more than 210,000 new jobs were created in August, the actual figures came back much weaker than that. According to the report, the United States economy only added a little more than 140,000 new non-farm jobs. This news prompted the US Dollar as well as US equities to peg downward a bit. This also caused the spot values of precious metals to tick up ever so slightly.
As we look ahead to next week, you can expect another action-packed 5 day trading session. There isn’t all that much economic data on the slate, but there will be plenty of attention paid to the progress of the US Dollar as well as US equity markets.