Gold Spot Price Open: $1,274

Gold Spot Price Close: $1,269

Change in Gold Spot Price: -$5

Silver Spot Price Open: $17.92

Silver Spot Price Close: $17.73

Change in Silver Spot Price: -$0.19

Precious metals continued to trend downward on Wednesday, continuing the losing trend that began a day before. When all was said and done, gold lost about 5 dollars while silver ended up losing about 19 cents. Platinum and palladium also lost on the day, with platinum losing a little more than 10 dollars while palladium ended up losing more than 20 dollars.

Service Sector Data Mostly Impresses

As was touched upon yesterday, gold and silver were always going to continue to trend downward if US data remained strong. That is exactly what happened today when investors were on the receiving end of some upbeat services sector data. The Institute for Supply Management released its non-manufacturing Purchasing Managers Index, and it showed that September was a healthy month for what is arguably the largest sector of the US economy. Compared to an August ISM non-manufacturing PMI reading of just over 51%, September’s PMI jumped forward to 57%. This is a nice month-to-month jump, and shows that the services sector is gaining strength. Most experts were expecting a jump, but the general consensus was for the PMI to hit 53% and not extend much further. Naturally, this data took many by surprise.

According to the ISM’s report, “The comments from the respondents are mostly positive about business conditions and the overall economy. A degree of uncertainty does exist due to geopolitical conditions coupled with the upcoming U.S. presidential election.”

This upbeat services sector data is doing well to undermine any bit of bargain-hunting that might have come as a result of yesterday’s big decline. In fact, while gold and silver were trading positively to begin the day, the release of this data altered that course and pushed metals right back down again.

September ADP Data Released

Being the first full week of trading for the month of October, jobs data from the United States was always going to take center stage. After yesterday’s massive decline on the part of precious metals, that grew truer still.

ADP, the payrolls processor, released its data and showed that little more than 150,000 private-sector jobs were added to the economy last month. This fell short of expectations which called for anywhere from 170,000-175,000 jobs to have been added.

On its face, the ADP data may look like a poor report to reflect upon, but many analysts would argue that that is not true. Mark Zandi is one of those analysts, and commented on the data by saying, “It’s solid, it’s double the rate of the growth in the working-age population. At this pace of growth, the underemployed and unemployed continue to get absorbed and we continue to approach full employment. It’s not as strong as it was 6-12 months ago, but I think that’s going to happen.”

While the ADP report may not do much in the way of swaying economic policies (ie. The Fed), it does have a lot to do with the overall unemployment rate. Talking about today’s ADP report and what it means for the overall rate of unemployment, Zandi said, “The unemployment rate is 4.8%, that’s consistent with full employment. We do have part-timers who need more hours, that want more hours and we got some folks that stepped out of the workforce that are coming back in as job opportunities become more available. That’s why the unemployment rate has not fallen and we’re getting stronger labor force growth.”

So, while today’s report may have you thinking negatively about the labor market, diving into the numbers and looking a bit closer at the factors that matter will paint a different picture.

Wrap-Up

All in all, today was a day dominated by economic data from the United States. What’s more, the economic data we did receive was determined to be mostly positive. As a result, gold and silver spot values suffered and are continuing to reel after Tuesday’s massive losses. It will be interesting to see, in the coming few days, if metals can recover or if this will be one of the single worst weeks we have seen in recent months.