April 2nd Midweek Gold Market Update

After more than 6 consecutive trading sessions in which they posted losses, precious metals were finally able to rebound a bit on Wednesday. Spot gold is still below the $1,3000 threshold, but has inched closer during the first half of the day.

This week will continue to be busy from an economic data standpoint, but the two most important events of the week will not take place until Thursday and Friday respectively. On Thursday, the European Central Bank is scheduled to have their monthly policy meeting, after which Mario Draghi is expected to address the media. Due to the rising occurrence of deflation worries across the European Union, some investors are expecting to see more monetary stimulus come as a result of this week’s meeting.

On Friday, US and world investors will be greeted with the latest non-farm payrolls data from March. There is no saying how many jobs were added last month, but recent remarks from members of the Fed have much of the market convinced that payroll additions were healthy in March.

This Week’s Economic Data

US economic data for the week has thus far not pushed spot gold and silver too far in any direction. While most of it has been upbeat, no reports released this week have beaten expectations so drastically that it had any impact on gold nor silver.

While the market is most heavily anticipating Friday’s payrolls data from March, Wednesday marked the release of the ADP employment report for March. The ADP report showed that about 191,000 jobs were added in March; a number that fell slightly short of expectations. Regardless, the news was taken as a positive after the last few months have emitted nothing but downbeat data.

Bargain hunters were able to drive spot gold and silver upward today, but in reality the market is really just holding until the payrolls data on Friday. For many, this week’s payrolls data will be a very telling sign of just how strong the US economy currently is. If Friday’s report beats market expectations by any margin, expect spot gold and silver to come falling right back down. Few bullish factors have made their way to the marketplace over the past few days and that, more than anything, is what is driving the spot value of gold downward. It will be interesting to see if the latter half of the week will bode any better for precious metals.

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