What's Ahead For Gold On May 1, 2014 - Gainesville Coins News
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What's Ahead For Gold On May 1, 2014

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What's Ahead For Gold On May 1, 2014

What Happened Yesterday?

Gold got a surprise lift on Wednesday from a truly terrible first quarter GDP, and mortgage applications plummeted.

The ADP private sector payrolls and Chicago PMI helped equity markets recover, which depressed gold. The FOMC pronouncement that the economy was doing well and getting better caused gold to give up gains.

What's Up For Tomorrow?

Personal Income for March (8:30am ET):

70% of the economy is driven by consumer spending, so the amount of money those consumers have to spend is a matter of great interest to many people.

What To Expect:

February's numbers were much lower than expected, but that was blamed on the "polar vortexes." Analysts are expecting a big job in March's numbers, especially since the payroll numbers have improved.

Effect On Gold:

Super-good numbers will help boost the stock market. Since gold usually moves opposite of stocks, it may provide a headwind for metals, or they may shrug it off.

First-time Jobless Claims (8:30am ET):

This is the weekly report on newly unemployed people filing for unemployment assistance for the first time. If companies are firing a lot of people, it's taken as a sign that business is bad and that the economy is struggling.

What To Expect:

Jobless claims last week jumped by 29,000 over the previous week. If this week comes in with a large number, markets will take it as a sign that the economy is not where the Fed wants it to be, and will push back any plans to raise benchmark interest rates. Depending on other factors, the stock market may treat this as "bad news is good news," since they're addicted to the super-low interest rates. Analysts are expecting a 9,000 drop in new applications, down to 320,000.

Effect on Gold:

Gold usually keys off the dollar's reaction to this report. However, the dollar has been doing horribly this month, so it's hard to say.

April Manufacturing PMI (9:45am ET):

The Manufacturing Purchasing Managers Index measures factory activity in the U.S. Analysts use it to estimate how the retail economy will be doing.

What To Expect:

March came in at a relatively strong 55.5 (anything over 50 signifies economic expansion.) Experts are predicting a marginally stronger 55.8 for April.

Effect on Gold:

The PMI report has a noticeable effect on traders' outlook on the economy. if they numbers surprise to the upside, it may indicate to some that some manufacturing stocks are not overvalued, and pull money into equities.

The big numbers for the rest of the week will be non-farm payrolls on Friday. Absent any Ukrainian shenanigans, this will be the most important event of the week.


by Steven Cochran

Gainesville Coins Portfolio Tracker and Financial News

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