Precious metals are moving noticeably higher to begin the day on Thursday, fueled by a more dovish set of minutes from the FOMC. Apart from yesterday’s minutes release, the first half of this week did not play host to too much in the way of markets-moving economic data. While there was some European data on the table, most of which was poor, it did not move markets very drastically in any one direction.
What did have an affect on the marketplace, however, was last week’s US Labor Department non-farm payrolls report for September. As is always the case, the non-farms report was hawked over by investors the world over. In the lead-up to the report’s release, most market experts were expecting somewhere in the neighborhood of 215,000 new jobs to be added to the US economy during September. Much to the surprise of almost everyone, however, the data showed that nearly 250,000 new jobs were created last month. This news aided the progress of US equities as well as the US Dollar, though the latter of those two asset classes has had a rough run of form throughout the first few days of this week.
Dovish Fed Minutes Met by Investors With Surprise
Each and every month, there are two big dates with regard to the United States’ Federal Open Market Committee–the date of the actual FOMC meeting, as well as the day upon which the minutes from said meeting are made public. Yesterday fell into the category of the latter date and when the minutes were made public, investors were quite surprised to be reading what the FOMC had to say.
For one, the FOMC was in almost total agreement that the economic downturn currently being experienced by the EU and Japanese economic systems may, with time, end up weighing on the strength of the US economy as well. What’s more, there were a few members of the Fed that are of the belief that the US Dollar’s recent rally will eventually catch up to the US economy and impede further growth sometime down the road. What all this means is that the FOMC may be forced to hold off on raising interest rates anytime soon. Because of this growing belief, the value of US equities, treasuries, and precious metals have all been on the up and up since the time markets opened today. Unfortunately for the US Dollar, however, such dovish FOMC minutes have acted as a weight that is pushing the greenback’s value lower.
As we approach the last day and a half or so of the week, it will be interesting to see if gold and silver will continue to move forward or if they have already maxed out their gains for the week. Keep in mind that even though metals have made progress so far this week, the market is still very bearish with regard to gold and silver.