For precious metals, the last 5 days have been better than most 5-day trading sessions we have seen in recent history. Both gold and silver, thanks to surges made on Wednesday, were able to finish the week well above where they began it. A slumping US Dollar has come to the aid of precious metals, but so too have a few other factors worth noting.
As we look ahead to the weeks to come, it is quite clear that the main focus of the marketplace remains the future of interest rates in the United States. The next FOMC meeting is only a few weeks away, so it will be interesting to see what data comes from the United States during that time.
US Economic Data Mostly Disappoints
For the United States, the last few days’ worth of economic data have been about in line with what we have been receiving lately. Report after report missed the mark and is beginning to have investors worried about whether or not the US economy will improve anytime soon. After all, in the lead-up to 2015, most experts were anticipating that this year would be one of extremely positive growth. Almost halfway through the year, we really haven’t seen the economic growth everyone expected, and things don’t look like improving anytime soon.
This week it was April’s retail sales report that really let everyone down. From March to April, the expectation was for retail sales to have increased by about .2%. When the figures were released, it was determined that retail sales remained more or less unchanged from March to April. Producer Price data also came back much worse than expected, causing the Dollar and stocks to take a bit of a hit. In fact, the Dollar has performed poorly for the better part of the last month, ever since putting in a market-top.
Economic data from the United States improved on Thursday when it was reported that weekly jobless claims came in even lower last week than the week before. Compared to an expected number of claims totaling 275,000, the actual figures came back showing that only 264,000 claims for unemployment benefits were claimed. This news helped stop the Dollar’s decline, but did not contribute to any gains.
For gold and silver, all of this downbeat economic data from the United States is very much being seen as a good thing. After all, the middle part of this week is when most of the poor data was released, and coincidentally it is also when precious metals spot values made their largest strides forward.
Miscellaneous Global News
Besides the continued and undivided focus on the US economy, investors from the US and elsewhere didn’t have much else to focus on. On Sunday, it was announced that China’s central bank once again reduced the country’s interest rate. China has made this move a few times this year already and it is becoming quite clear that the large Asian nation is actively trying to get a grip of its struggling economy. Despite this, demand for gold and silver, but especially gold, from Asia has been on the up and up recently.
From India especially, demand for the yellow metals has risen dramatically thanks to lowered tariffs associated with imported, foreign gold.
Another big talking point from earlier in the week was a multi-billion Euro debt repayment that was to be made by Greece to the IMF. Most people were under the impression that Greece might not honor this agreement, but that fear subsided by afternoon on Tuesday when it was announced that Greece did, in fact, make that payment. Still, going forward we will continue to keep an eye on Greece and everything surrounding their debt situation.