After sinking in overnight trading, the gold price rebounded enthusiastically on Thursday morning following the release of the ADP private payrolls just before markets opened in New York. The yellow metal was down just $1 this morning to recover from its earlier losses. Spot silver was still down about 8¢ per ounce, sliding nearly 0.5% to $16/oz even. Platinum was down slightly while palladium sank further, shedding 1.2%.
Here's a glance at Wednesday's closing numbers for the metals:
Gold: $1,226.70/oz (+$3.50, +0.29%) Silver: $16.07/oz (+1¢, +0.09%) Platinum: $908/oz (-$4, -0.44%) Palladium: $838/oz (-$12, -1.41%)
All Eyes on Employment
A pair of important data points were released by ADP on Thursday. First, private employers added just 158,000 new workers to their payrolls during June, coming in well below expectations. The strong rate of new hires during May was also revised downward. Meanwhile, ADP also reported this morning that jobless claims during the first week of July were higher than expected, marking the third consecutive week the figure has risen. Taken together, although these two snapshots of the labor market are discouraging, most economists still believe the employment outlook in the U.S. remains fairly robust.
More important than the ADP estimates will be tomorrow's nonfarm payrolls report from the Labor Department. In other economic developments in the U.S. worth keeping an eye on, the Federal Reserve Vice Chair Stanley Fischer will be speaking later today. Yesterday's release of last month's FOMC meeting minutes hinted at the possibility that the central bank will finally begin drawing down its bloated balance sheet in September, effectively signaling the end of quantitative easing (QE) in the U.S.
Group of 20 Meeting
The major international news this week is the beginning of the G20 summit being held in Hamburg, Germany. The meeting usually draws little attention, as leaders from the world's 20 largest economies meet to discuss the economic challenges facing the world. However, this gathering is garnering greater attention because of the fault lines between President Trump's "America First" stance and German Chancellor Angela Merkel's affirmation of free trade.
While many experts concede that the strained relationship between the U.S. and Europe has not fundamentally altered the commitment to a strong trans-Atlantic alliance, the politics of the day are creating an unusual alignment of Europe and China on the side of free trade, while the U.S. pushes for more protectionism with Trump as its champion. There is also a rift widening between the U.S. and Russia over how to handle North Korean aggression. Like China, the Russians probably don't appreciate any excuse, however justified, for heightened U.S. military presence in its own backyard.
In a related development that is now nearly five years in the making, Japan is close to finalizing a sweeping free trade agreement with the European Union that will remove a number of tariffs on a number of products, especially agricultural ones. Of course, the deal also comes with its own set of new regulations and standards for consumer protection and safety.
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