The end of July and beginning of August brought with it a ping-pong style 5 day chart. Prices would rise, and then, just as quickly, fall right back down. The two major news stories investors were looking forward to hearing this week both occurred on Friday and both took place in the United States.
It seems as though we cannot make it one 5-day session without talking about the Federal Reserve, and this week is no different. The Federal Open Market Committee’s latest meeting caught the attention of investors, though in the end it was more of the same old story from the Fed.
US Economic Data
During the middle of the week, some economic news was released that further enforced the school of thought that the US economy has improved significantly throughout the course of the past few years. The first bit of news came in the form of the second-quarter US GDP report, and the numbers that came back exceeded the expectations of most. Though it was generally agreed that 2013’s second quarter produced GDP growth of .9%, real figures rang in at positive 1.7%, almost a full percentage point better than expected. On the same day an ADP jobs report also came back better than expected. Both of these stories almost immediately caused gold and silver to take a plunge, but precious metals’ descent was short-lived as an announcement later in the day caused gold and silver to regain their posted losses and then some.
On Friday, investors were waiting for the latest US jobs report, a report which was expected to see non-farm payrolls rise by about 175,000. For the first time in a few weeks a US economic report came back weaker than expected when non-farm payrolls actually only rose by 162,000; a number that was still good enough to knock the unemployment rate from 7.6% to 7.5%. This lower reading slightly helped gold and silver on the final day of the week.
Latest FOMC Meeting
Whenever the Federal Open Market Committee is scheduled to meet, investors and market watchers pay attention because what they have to say usually has some sort of direct effect on the spot values of gold and silver. Despite the FOMC’s meeting being scheduled for Friday, the prepared text for the meeting was released on Wednesday and thus, that is when the market reacted.
People were not expecting big news from the meeting, rather it was anticipated that the Fed would more or less reiterate what Ben Bernanke had to say a few weeks ago. According to the text, that is exactly what the meeting was about in that the FOMC discussed how they plan on retaining accommodative monetary policy for the time being. They also reiterated the fact that the government’s monthly bond-buying initiative, also known as Quantitative Easing, is not on a preset course to being done away with by the end of 2013, regardless of what many people have been thinking lately.
Gold started the week at $1,334 and by the time markets closed on Friday it was sitting at $1,309. This was a loss of about $25 on the week.
Silver started the week at $20.05 and at the end of the day Friday was sitting at $19.89. This was a loss of about 16 cents.
This market update is provided weekly with analysis. You can always check spot value of silver by watching our on-site charts.