Written by Sumit Roy  |

November 02, 2012

Week In Review: Gold & Silver Plunge Below Support After Jobs Report; Oil Struggles Ahead of US Elections

Details

We examine the latest developments in commodity markets and the week’s performance.

Stocks rebounded from last week’s losses, but commodities were only able to put in mixed performance this week despite the release of relatively strong economic data. Gold and silver plunged 2 and 4 percent, respectively, on the heels of today’s improved U.S. jobs report. The S&P 500 rose about 1 percent, taking its year-to-date gain to 13.5 percent.

Americans will head to the polls on Tuesday, Nov. 6, to cast their ballots for the president of the United States. The result could have significant implications for commodities and stocks, depending on how the outcome is interpreted.

Macroeconomic Highlights

The biggest economic release of the week was today’s U.S. employment report for October. The Bureau of Labor Statistics said that nonfarm payrolls in the month grew by 171K, better than the anticipated 125K. The prior month's jobs gain was revised up from 114K to 148K.

The unemployment rate ticked up from 7.8 to 7.9 percent after falling sharply the month before, as more workers entered the labor force in search of jobs.

Meanwhile, manufacturing activity in the U.S. accelerated a bit in October. ISM's manufacturing PMI rose from 51.5 to 51.7, putting it at the best level since May.

At the same time, China’s official manufacturing PMI rose from 49.8 to 50.2 in October, putting it back above the 50 threshold that separates contraction from expansion and at the highest level since June.

Finally, the unemployment rate in the eurozone ticked up from 11.5 to 11.6 percent in September—a record high.

Commodity Wrap