Over the course of the past week or so gold and silver have gone on a pretty awful run as far as spot values are concerned. Just barely more than a week ago spot gold was flirting with the $1,400/ounce threshold while silver was well above $21/ounce. Then, as quickly as the two metals ascended, a lack of any new bullish news in conjunction with a weaker long-term outlook on precious metals drove spot values right back downward.
While last week was mostly devoid of any economic news, this week is an entirely different story. The market has already been handed its fair share of data and there is plenty more on the way over the last two to three days of the week. On Monday we got news that the Chinese manufacturing sector might not be completely done and dusted just yet, but they are still a far cry from the China the world has grown accustomed to. Worries with regard to rampant deflation are beginning to make their rounds across the EU and may force the European Central Bank, which has a meeting tomorrow, to institute some sort of new monetary stimulus measure(s). In addition to tomorrow’s ECB policy meeting, the investing world is waiting patiently for Friday’s release of non-farm payrolls data for the US in March. Most are expecting the data to be upbeat, but if recent history is any indication of the future this expectation is far from a guarantee.
Economic Data Slate
The US has already published a number of economic reports, most of which have bested market expectations. Though this is the case, economic data made public thus far this week has really had a marginal impact on spot values. Today marked the release of the latest ADP jobs report, but like most employment reports that aren’t the non-farm payrolls data, most investors were not particularly interested. Those that were saw that 191,000 jobs were added to the US economy in March. This number fell slightly below market expectations, but was taken as positive news due to the fact that it has been a while since the US has seen any type of significant month on month job growth. Keep in mind, however, that this report is meaningless when compared to this Friday’s payrolls data.
Tomorrow’s European Central Bank meeting will also be of particular interest to investors. As was stated in the opening paragraphs, worries about widespread deflation are once again taking center stage in Europe, so much so that the ECB may be forced into action. While it may not happen this month, or even next month, a lot of investors are expecting the ECB to employ new monetary stimulus measures in order to stave off deflation.
As we enter the latter stages of the week you can expect the spot values of gold and silver to respond directly to any and all economic data stemming from China, the EU, and the United States.