Gold and silver were delivered pretty substantial blows thanks to some much better than expected economic data. Due to the celebration of the Independence Day holiday tomorrow, today will be the last day of the trading week for a majority of investors. As a result, there is a boatload of economic data on the slate today, as well as an all-important European Central Bank meeting.
This week really saw investor attention shift away from the situation in Iraq, but that does not mean things have gotten any better there. While the violence has receded to some extent, the ISIS rebels are still in control of large parts of the country and are only growing their foothold. Even though investors paid little attention to Iraq this week, I have little doubt that it will be back in the headlines before long.
US Employment Report Shatters Expectations
Despite it being more or less customary that monthly employment reports in the United States are released on the first Friday of every month, this week proved to be an exception due to the 4th of July holiday falling tomorrow. Still, as is always the case, investors were anxiously awaiting what the non-farms data had to say, especially after yesterday’s ADP employment report showed a 280,000+ increase in jobs last month.
Prior to today, most market experts were anticipating that somewhere in the neighborhood of 212,000-215,000 non-farms jobs were added in June. Shockingly, the report showed that more than 285,000 jobs were added last month, good enough to reduce the unemployment rate to 6.1%. This news alone prompted the USD Index to shoot straight upward above the $80 threshold for the first time since last week. As you could have probably guessed, the surging US Dollar is one of the main culprits being why precious metals have been trading down most of the day.
The European Central Bank held their monthly policy meetin and, as expected, no major shifts in monetary policy were recorded. Now, investors are anxiously awaiting what ECB president Mario Draghi has to say to media.
Even though gold and silver are finishing this week posting losses for the first time in over a month, they are still in good positions and are finishing the week retaining a lot of the momentum they exhibited throughout the week.