Precious metals began the week in positive fashion, but by the time things came to a conclusion, they ended in more or less the same position they were in when the week began. Surprisingly, what started out as a slow week ended up bringing about a good bit of economic data and activity. Unfortunately for a lot of investors, however, this economic data did more to increase uneasiness than it did anything else.
As we look ahead to next week, there isn’t a whole lot of economic data on the table, but with the precious metals bulls gaining momentum, it is bound to be an interesting trading session.
Though this week was mostly quiet, the market was given a good bit of economic data from the United States to mull over. Over the course of the past few months, most data from the United States has been on the upbeat side of things and has given the wider world of investors a lot of confidence in the US economy. This week, however, the data was fairly poor and did more to hurt confidence in the US economy than anything else.
On Wednesday, a report released showed that retail sales in the United States for the month of September had taken a .3% decline on a month-by-month basis. Though no one was really anticipating retail sales to be overly positive, there were no expectations that things would backtrack. Also on Wednesday, investors got more dour news from the United States as it was reported that the producer price index in the US had fallen by one-tenth of one percent during the month of September. Though neither of these two data points can undermine the significant progress the US economy has made over the course of this year, they did do well to create some uncertainty.
Not helping matters at all is the fact that stock indexes in the United States have been extremely volatile as of late. While one day they are on the up and up, the next day they are taking a nosedive. This recent volatility suggests, to some, that perhaps the stock market rally we have seen in the United States this year might finally be coming to an end. All of this week’s activity out of the US economy has done well to create a risk-averse attitude amongst investors; something that is currently coming to the aid of precious metals.
At this point it shouldn’t come as much of a surprise, but the economic data made public out of the European Union this week was on the negative side of things. This has been a recurring theme as of late and causes one to wonder what, if anything, the European Central Bank will do to combat growing deflationary pressures as well as an EU economy that has been slowing and stagnating at times.
The market will continue to focus on the status of the European Union, but things there only seem to be getting worse with each passing day.