Precious metals did not really have a great 5-day trading session this week. Though things started off on the right foot, things quickly changed for the worse as early week gains were done away with by the time Thursday rolled around. From an economic data standpoint, things were light, but there were a few reports worth talking about.
As we look ahead to next week and everything that comes with it, I anticipate that the marketplace will be abuzz with activity. Most notably, next Tuesday and Wednesday mark the June meeting of the FOMC. With interest rate hike talk still going on almost daily, you can bet that the investing world will be searching high and low for more information regarding rate hikes.
Ball is in Greece’s Court
Greek debt negotiations abruptly came to an end this week when the IMF negotiation team returned home to Washington DC, clearly frustrated by the lack of progress being made. Though negotiations are far from over, there has not been much of any progress made over the course of the last few weeks.
Now, as the clock continues to wind down, the investing world is left to wonder what the future holds for Greece. Today, members from the European Commission were quoted as saying that while negotiations are far from over, the ball is most definitely in Greece’s court. What they mean by this is that, if a deal is going to be reached, that deal will depend entirely on the cooperation of Athens. Up to this point, Greece’s government has refused to cooperate with budgetary demands lobbed by the IMF and EU, and this is causing them to currently be missing out on billions of euros worth of bailout money.
Most think that this situation will be solved in one way or another by the end of the month, but for now it is looking like Greece and the IMF/EU will not reach a deal.
News from the United States
This week brought about some upbeat economic data from the United States, keeping in line with recent trends. On Wednesday, it was reported that retail sales during May rose on an annualized basis by more than expected. Prior to the data release, most market experts were anticipating that year on year retail sales in May were going to rise by just 1%. The data, however, showed that this annualized data was up by more than 1.2%. What’s more, imports during the month of May rose for the first time in ten months, signaling an improvement on the part of the US economy. On top of all of that, recent employment data has been upbeat in nature and is indicative of an economy that is improving.
As we look ahead to next week, it is impossible to ignore the FOMC meeting. Raised interest rates have dominated talking points for much of the last year, and more recently even more so. As it stands, there is a strong contingent of global investors who have grown convinced that the Federal Reserve is going to move to raise interest rates sometime this summer. Though I have my doubts, there is really no way for one to determine whether this growing belief has any basis in fact, or if this is nothing more than the market coming to a consensus on its own.
Regardless of what next week brings, I can assure you that the next few 5-day trading sessions are going to be vital for gold and silver. Unfortunately, as of now, it looks as though the road may only get rockier for precious metals.