Gold and silver finished off what has been a mildly impressive week in impressive fashion as both metals made gains on the back of a somewhat disappointing US jobs report for January. Though the report came back a little weaker than what was anticipated, US stocks were able to turn the last day of the week into a positive one. With recent stock sell-offs very fresh in our memories, it is interesting to see stocks make gains in the wake of a poor week of US economic data.
The European Central Bank met for their monthly policy meeting earlier this week, though no major changes came as a result. Some market analysts were expecting to see the ECB pull back interest rates as a result of better economic conditions in the region, but such was not the case. The overriding majority of the market, however, now believes the ECB may be prompted to make some sort of change to monetary policy should EU economic data remain upbeat.
Another Disappointing US Jobs Report
If you can recall to about this time a month ago, you might also remember a marketplace that was excited about the US economy and its recent performance. Then, seemingly out of nowhere, the jobs report for December caught the marketplace off guard when it came back so much weaker than what was expected. From that point on, the stability of the US economy has continually been called into question. It is for this reason and many more that this week’s employment report for January was of the utmost importance to investors.
Despite such a poor report a month ago, the market was still expecting about 190,000 jobs to have been added to the economy in January. When the report was finally published early Friday morning it disappointed investors for the second consecutive month. Compared to the expectation of 190,000+ jobs being added in January, the report indicated that, in fact, only 113,000 jobs were created.
This news prompted gold and silver to make gains and thus end the week in impressive fashion. What was confusing to many, however, was the US stock market’s positive performance in light of such a weak employment report. The free fall of US stocks we have seen over the last week or so has since calmed down, but the overall uneasiness investors have towards the US economy is still hanging around. For this reason it is fairly safe to assume that safe-haven demand for gold and silver will continue to be on the rise. Historically, whenever the US economy shows signs of instability the spot value of gold and silver tends to increase. Next week is important to investors who are wanting to know whether recently poor economic performance is an indication of an economic slowdown or simply a poor, but temporary run of form.