Precious metals spent most of the week declining, and it seems as though we are right in the thick of the summer doldrums. Though it is not at all unusual, the majority of the last few weeks have been quiet and devoid of much economic data. This seems to happen annually as the summer gets into full swing.
With all of this said, there was plenty for investors to pay attention to, it just so happened that very little of those noteworthy points ended up moving spot values all that much. The continued focus on Greece has brought about much of the same, but it seems as though our attention may only be drawn to that situation for a little while longer.
Marketplace Continues to Analyze Greece
As soon as the week got underway, investors the world over were once again optimistic about the likelihood of Greece and their creditors reaching a deal regarding the restructuring of debt repayments—something that would unlock billions of dollars in bailout money. Greece, one of the most financially insecure countries in the EU, is in desperate need of money as they have been cash-strapped for the better part of the last year.
As soon as this week got started, we heard news of a proposal put forth by Greece that saw Athens make serious concessions to creditors; concessions that Greece has been dancing around for quite some time. Immediately, lawmakers from Athens shot the deal down saying that, if approved, it would put the Greek economy in a situation it would not be able to crawl out of. Greek creditors from the IMF and EU, however, hailed the new proposal as a step in the right direction and something that would lay down the basis for a lasting deal.
The momentum of that new proposal faded quickly, however, because it is now Friday and no semblance of a deal has been made public. With the end of the month and a major payment to creditors coming quickly, the world is slowly but surely coming to terms with the fact that Greece may not be in the European Union for all that much longer. Though this has been the talk of the marketplace this week, there is really nothing new going on with Greece. Hopefully, with the weekend and more negotiations, we will come back Monday having heard of some sort of progress being made.
US Economic Data Revised Upward
If you can remember, the first quarter of 2015 was a fairly dismal one for the US economy. Incredibly poor winter conditions killed economic output and painted a very negative picture of US economic recovery. Though all that has since dramatically changed, the negative outlook from the first quarter has still been taking its toll on US economic outlook.
Luckily, this week brought about a bit of a change thanks to the Commerce Department having revised upward their first quarter US GDP reading. Originally, it was recorded that US GDP in the first quarter declined by .7%, but the revision saw the US economy contract by only .2%. This news was welcomed with open arms by investors who were, quite honestly, very skeptical of the rate of growth of the US economy this year. Moving forward, I expect that economic data from the US will remain important, but we now know that the Fed is taking a more cautious approach to interest rate hikes, so investors may not read so heavily into what future economic data has to say.