There’s a massive amount of economic data being released this week and it seems gold prices are caught in a crossfire. Here’s a look at the headlines of this week and how it relates to the yellow metal.
Early This Week:
Data released early in the week showed that U.S. manufacturing grew at its fastest pace in more than two years during the month of November. It’s also speculated that American payrolls have increased by over 180,000 last month according to a Bloomberg survey. Gold prices fell early in the week in fear that this positive economic data will urge the Federal Reserve to begin tapering the current stimulus program.
Wednesday Jobs Report:
According to Automatic Data Processing, private-sector hiring in the month of November boasted the best numbers all year with 215,000 new jobs being added. Typically this would be bad news for gold as it only fans the flames on the Fed’s desire to begin tapering. According to Chintan Karnani, chief market analyst at Insignia Consultants, those numbers “had already been factored in by the markets as noticed by the fall in gold and silver in European morning session.” He went on to say “The rise after the ADP numbers is due to (a) greater physical demand globally (b) a short-covering rally before the European Central Bank and Bank of England meeting.”
Although Wednesday has seen a positive upward swing for gold prices, these headlines only provide encouragement for the Federal Reserve to begin tapering. If this wasn’t enough in one day, the Fed will also release its Beige Book today after the Comex trading session. The Federal Reserve Beige Book is published eight times a year and is better known as the Summary of Commentary on Current Economic Conditions.
Remainder of the Week:
Thursday will undoubtedly be one of the biggest days for economic data. The reports on third quarter GDP will be released and many experts believe the numbers will be positive. Friday will see the non-farm payrolls report released and, again, this set of data is being projected as largely positive. Early next week may bring a fantastic buying opportunity for gold. With this flood of positive economic data threatening to lower gold prices once again, bargain hunters will undoubtedly find the yellow metal at a very tempting price.
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