by David Levenstein, Mountain Vision:
Gold and silver prices rallied early last week to hit three-week highs after the morning release of a very downbeat U.S. ISM non-manufacturing report for August. The gains extended Friday’s price advances after the release of the latest employment report in the US.
The weaker-than-expected ISM report comes on the heels of a slightly downbeat U.S. jobs report for August, which was released last Friday that showed that non-farm employment in the U.S. grew by lower-than-expected 151,000 during August. Expectations were for nonfarm payrolls to rise by 175,000 to 185,000, with a jobless rate of 4.8%.
The U.S. non-manufacturing purchasing managers index reading for August was 51.4 versus July’s 55.5. A reading of 55.5 was expected for August. That was the lowest reading in six years. Other indicators in the ISM report also missed to the downside of market expectations. The ISM data put very strong downside price pressure on the U.S. dollar index, which in turn gave support to the precious metals markets.
This recent U.S. economic data plays right into the hands of the U.S. monetary policy doves, who do not want to see the Federal Reserve raise interest rates any time soon. Such a scenario would also be bullish for the precious metals markets.
Read more at original source: