Thanks to reeling equities as well as a USD Index that has come under pressure, gold and silver have been able to bounce back modestly on Monday. Unfortunately, gains thus far have been modest to say the least. With that being said, however, we are seeing more of a risk-off attitude developing amongst investors and there is a growing belief that such an attitude might consume the whole of this week. We will just have to wait and see to find out though.
On the whole, this week is not expected to bring about too much in the way of economic data and for that reason I do not anticipate metals moving too far in any single direction. Still, we all know that just about anything can happen over the course of a 5-day trading session.
Jobs Data Beats Expectations
The biggest piece of economic data last week came on Friday in the form of the most recent employment data for the US for the month of January. In the lead-up to the report’s release, most experts were anticipating that just around 230,000 new, non-farm payrolls had been added to the US economy. When the figures were made public they showed that nearly 260,000 new jobs were created in January.
As a result of this data beating expectations, the market immediately saw the US Dollar jump forward while gold and silver were punished.
Though the jobs figures themselves were great, the focus for many remains the fact that wage growth in the United States is almost non-existent. At the end of the day, it doesn’t matter how many jobs are being added to the economy if workers are not getting higher wages. This is something we will continue to keep an eye on as the year moves forward.
Greek Developments Over the Weekend
With Greece’s new parliament/government being the center of attention recently, it shouldn’t come as much of a surprise that we have some news to report from the struggling Mediterranean economy.
Over the weekend, worries regarding whether Greece will remain part of the European Union or not intensified as the new Greek PM openly tried to dodge previously agreed repayments of loans. In addition, Greek PM Tsipras made it clear that he would not accept an extension to the previously established bailout plan, but would rather like a bridge loan.
This news worked well to send Greek equities shooting downward and destabilized most other European equity markets as well as the Euro currency. Though the USD Index on the whole is trading down today, the Dollar itself managed to gain against the Euro.
Greek’s sovereign debt problems will continue to be a focus for investors as we head further into 2015.