Precious metals have gotten the month of July off to a nice start by posting sizeable gains to close out the week and begin the month. To be fair, this week did not offer much in the way of fresh data, but as month and quarter-end data looms, investors are perking up to see how global economies fared during June and during the 2nd quarter of 2016. This past 5-day trading session has given investors a nice opportunity to catch their breath after what has been a hectic 2 weeks.
As it stands currently, both gold and silver have nice gains to reflect upon through the last few weeks. With plenty of momentum, metals are pushing the upper limits of what is possible. Silver, for example, finished the 2nd-quarter and recorded the best 3 month run in roughly 4 years. Gold had its best month of 2016 and things are generally looking up for the metals market.
BRExit Called Into Focus Again
Now that the market has officially come to terms with the fact that the UK is no longer a member of the European Union, investors are beginning to wonder what happens next. In general, confidence across the EU is down and is expected to remain that way until something comes along to alter that thought process. In fact, this week brought about a report which indicated that consumer confidence across the region moved backwards during June. This report is not a huge deal, but the fact that this report was conceived and published prior to the BRExit decision, one cannot help but wonder just how far consumer confidence has fallen in the past few days.
As we look ahead to the next few weeks, no one really knows what to expect. Some people are thinking that other countries may be prompted to follow the UK’s lead, while others are waiting to see if Scotland and Northern Ireland make moves to break away from the UK in order to remain a part of the EU.
What we do know, however, is that all of this uncertainty is playing right inot the hands of the gold and silver bulls. So long as uncertainty abounds, this is likely to remain the case.
US Economic Data Dealt
A few pieces of US economic data were dealt this week, and all of them were nothing more than a precursor to the reports that will be coming out next week. First, it was announced earlier in the week that first quarter GDP for the US was revised upward. After a paltry .8% gain was initially reported, we saw the actual figure bumped just above 1%. This is by no means a big deal nor major talking point, but it is encouraging to see nonetheless.
As for some not so great news, it was reported that last week’s initial claims for unemployment benefits jumped upward by 10,000. This is also not that big of a deal, but did well to derail a string of consecutive weeks where jobless claims moved downward.
Finally, the big talking point this week was the fact that interest rates might not only not be risen, they may, in fact, be slashed. As a result of the BRExit vote, central banks the world over are flirting with the idea of providing more support to their respective economies. Now, we are seeing a marketplace that went from expecting multiple rate hikes in a year to one that might very well soon see rates cut again. This is something that we will focus on going forward as it is one more factor lending support for precious metals. It will be truly interesting to see how this pans out going forward. With quarter-end economic data on the table, the next few weeks could get interesting.