Gold and silver are trading slightly down this morning in the wake of February’s non-farm payrolls data. Prior to the release of the data, it was looking like spot gold and silver would, for yet another week, end posting gains for the 5-day session. Now, however, it is much more likely that increased investor risk-appetite will effectively weigh on precious metals’ spot values quite significantly.
Over the course of the past week, the only mainstay in the headlines was the ongoing situation in Ukraine. There have been a few developments with regard to Ukraine, but for the most part tensions this week were only a shadow of what they were a week ago.
US Employment Data Beats Market Expectations…Finally
After the first two months of 2014 yielded sub-par employment data, investors were hoping February’s data would show a change of pace. That wish was granted because it was reported that the US added about 175,000 jobs this past February. This number beat the 150,000 addition that was expected by the market, even if only slightly. With that being said, however, the overall unemployment rate jumped from 6.6% to 6.7%. While the jump in the overall unemployment data is unnerving to some, market analysts are saying it is simply a byproduct of more people confident enough to go out seeking job. This news only added to already strong investor risk-appetite this week and turned small gains being made by precious metals into decent losses thus far this morning.
In addition to today’s upbeat employment data, the US Labor Department revised jobs figures from the last few months. For January, the payrolls addition was bumped up to 129,000 from a previously low addition of 113,000. December’s data was revised as well, up to 84,000 from a previous reading of only 75,000 jobs added. In all, today’s employment data and revisions worked wholly against precious metals.
Tensions Deescalate In Ukraine
In the early parts of this week, the world was expecting to see tensions in Ukraine boil over into an armed conflict between Russia and the large eastern European nation. Fortunately, however, cooler heads prevailed as Ukraine, Russia, and the West seemed more willing to employ diplomatic solutions to the crisis.
Then, seemingly without warning, Russia declared that it would annex the Crimean region of Ukraine and make it the newest addition to the Russian Federation. Despite opposition from the rest of Ukraine and the West, the Crimean parliament voted unanimously to join Russia. In 10 days, Crimean citizens will participate in a similar vote though because Crimea is dominated by ethnic Russians, it is expected that the vote will yield similar results as the parliamentary vote.
Tensions are now just a shadow of what they were a week ago, though things stand the chance of boiling over at any point going forward. For this reason, we will continue to closely monitor the situation and take note of any and all developments going forward.