Gold: $1,177.79 0.12
Silver: $17.20 -0.07
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August 19th Weekly Silver Market Update
Article By: Kyle Wanchalk on August 19th, 2016

Precious metals ended the day suffering small losses and will reflect on this week as one we can quickly forget. Though there was not an abundance of economic data dealt, this week did provide a bit more activity than you might have anticipated from a week in the middle of August. Still, despite losing some value over the course of the past 5 days, metals are still in a somewhat strong position thanks to the overall uncertainty of investors in the US and abroad.

Weekly Jobless Claims, Other Economic Data Dealt

A report released Thursday by the Philadelphia Federal Reserve showed that the manufacturing sector of the US economy is improving slowly but surely. In fact, the speed at which we are seeing improvement cannot accurately be described as slow. The Fed’s manufacturing business outlook survey delivered a reading of 2 for August. Though this may mean nothing to you, that very same reading was in the negatives a little more than a month ago. Even if you do not understand this survey’s metrics, it is easy to see that a lot of improvement took place in a short amount of time.

In addition to this bit of data, the weekly jobless claims report was dealt. Once again, first time claims for unemployment benefits fell last week, this time by 4,000. Now, the seasonally-adjusted average number of claims is sitting right around 262,000. Considering expectations were for the seasonally-adjusted average to rise to 269,000, this data is being welcomed with open arms.

All in all, the current view of the US employment situation is an upbeat one. We have had a few consecutive weeks where the weekly jobless claims data was upbeat, and have already digested July’s surprisingly strong employment data. As for other sectors of the economy, however, the same cannot be said. We are seeing a lot of inconsistency, and it is this inconsistency that is forcing the Fed to push further interest rate hikes off further and further into the future.

FOMC Minutes Dealt

On Monday and Tuesday, there really wasn’t a lot going on across the global marketplace. With that said, investors were preparing themselves for Wednesday’s release of the minutes from the latest FOMC meeting. Though no one was expecting much, a surprise dealt Wednesday would not be the first time the Fed offered up some shocking news via the meeting’s minutes.

When the minutes were finally released on Wednesday, one thing was clear; the Fed is very divided when it comes to the prospect of hiking interest rates again. To the surprise of many, there were quite a few FOMC members who were in favor of hiking interest rates in July. It must be emphasized that the number of people favoring a hike did not at all come near to the number of people who were hoping to see rates kept steady, which is exactly what played out.

Initially, the news was deemed to be on the hawkish side of things simply because it previously did not seem like there was much interest at all with regard to raising rates. After a day or so, however, the overall tone was determined to be more dovish than anything because, while the Fed is divided, that division is not so severe that we can expect a majority of the members of the FOMC to change their mind with regard to rate hikes anytime soon. As it was a few weeks ago it is right now, the Fed is insisting that consistently stronger economic data be dealt here at home before policy can be altered any further. By the time the dust settled, the FOMC minutes ended up coming to the aid of precious metals, albeit only slightly.