Precious metals continued to lose value on Friday and the week as a whole was more or less lost. To be fair, there wasn’t all that much in the way of fresh economic data dealt, however the data that was dealt ended up mostly working against metals.
In addition to some data from the US, crude oil’s future was once again called into the spotlight this week. With the value of crude not doing much in the way of improving, it only makes sense that investors and market experts are wondering what the future holds.
OPEC Meeting Called Into Center Stage
From the early parts of the week, investors had something to speculate about thanks to rumors that OPEC would be meeting next week to once again talk about possibly cutting daily output of crude oil. If you have been around for the past year or more, hearing this may not raise your eyebrows because this is far from the first time OPEC has met to determine what they can do to stabilize the crude oil market.
Also pushing crude oil’s spot value lower this week was a report that indicated that the US had larger stockpiles of crude oil than anticipated. With more oil on hand, and even more oil being produced on a daily basis, it should come as no surprise that crude oil’s spot value is falling. While this did lend some support to precious metals, some stronger stocks and a stronger USD kept precious metals in check.
US Q2 Productivity Falls Again
One of the only noteworthy pieces of economic data that were released this week had to do with worker productivity in the US through the 2nd quarter of this year. Officially, productivity fell, which marks the third consecutive quarter in which this ended up being true. This news, as you might have expected, did not have too much of an impact on the marketplace simply due to the fact that it is more of a fringe report that investors tend to ignore.
The weekly jobless claims report, however, was not ignored and showed that the US labor market is beginning to show sustained improvement. The seasonally-adjusted average number of claims fell to 266,000 as well. To put things in perspective, any number below the 300,000 mark as far as the seasonally-adjusted average is concerned is good news for investors. Despite what people have to say about other sectors of the US economy, it is clear to see that the labor market is doing just fine.
All in all, the last 5 days have been mostly uneventful and did not bring about all that much in the way of fresh economic data. For this reason, precious metals are mostly moving in the same direction and that means that spot values are likely to be subdued for an extended period of time. This is especially true because crude oil has been performing better this week thanks to the rumors regarding that OPEC meeting. For some reason, investors seem to be a bit more confident that OPEC will actually make a decision that leads to crude oil production cuts, even though this has not happened at any of the previous 3 meetings.
Interest rate hike talk was mostly nonexistent this week, but you can expect that this will not go anywhere anytime soon. Unfortunately, it is still very unclear when we can expect rates to be hiked again. Conservative estimates say that rates will be kept put for the remainder of the year, however there are some people who think that we might see at least one additional rate hike before the year is through.