Silver Surges After Jobs Data Disappoints

APMEX

9/3/2021 10:27:17 AM

Silver Increases After Jobs Data Disappoints

Metals, stocks, and the dollar remained relatively flat throughout most of the week. All were seemingly in a holding pattern ahead of U.S. jobs data later in the week. This week’s employment data carried extra significance, as Fed officials recently indicated that considerable job growth would need to be seen as a pre-condition for tapering.

As a result, significant price movements were not seen for bullion throughout most of the week. Gold started the week around $1,815. Fueled by Friday’s dovish Fed speak, the yellow metal would touch $1,822 on Monday.

Silver opened the week near a one-month high, just above $24. Both metals seemed to have lost what momentum was gained after Fridays Fed address, as investors held their breath for employment data. U.S. equities also opened the week on a high note, with the S&P 500 and Nasdaq both reaching new all-time highs on Monday.

Although stocks were slightly down by Tuesday, all three major indices finished August in positive territory. The S&P rose nearly 3% for the month, for its seventh straight monthly gain. The Nasdaq and Dow were up in August as well, ending the month up by 4% and 1.2% respectively. Recovery hopes and higher corporate earnings seemed to have fueled equities this month despite rising Delta variant cases, overseas turmoil, and rumors of Fed tapering.

Conversely, the dollar index (DXY) started the week in a downward trajectory. The greenback was already pressured by the same dovish Fed speak that boosted gold. However, the downturn was accelerated on Tuesday after a weaker Chicago PMI reading.

Concerns over persistent inflation and Covid cases drove U.S. consumer confidence to a six-month low. This revealed that Americans feel a real and growing obstacle in higher prices, even though the Fed is still describing current inflation levels as “transitory” in nature.

The first round of jobs data came on Thursday, via initial jobless claims. This showed a pandemic-era low of 340,000 jobless claims. This data bolstered stocks, as the Nasdaq once again reached record highs. Meanwhile, silver dipped by 1.6% to about $23.80 an ounce. Silver would remain below $24 for Thursday’s close.

Gold was trading sideways on Thursday, at around $1,810 an ounce. By Thursday evening, the dollar had failed to regain positive footing and Treasury yields were slightly lower. Investors braced for Friday’s Nonfarm payroll data and unemployment numbers.

Nonfarm payroll data was released Friday morning. This revealed that the U.S. added just 235,000 jobs after 720,000 was forecasted. The big miss in jobs meant two things. First, it meant a boost for gold and silver. It’s also unlikely the taper timeline will be moved up, nor will a firm date be provided anytime soon. Unemployment rates remained unchanged at the predicted 5.2%.

So far, stocks have fallen while gold has risen to $1,828 an ounce. At this rate, gold might see a modest gain for the week, as the yellow metal is currently up 0.82%. Silver has surged by over 2%, and is currently near $24.50, which is close to a one-month high.