Gold and silver spot values have had an eventful week, but are both looking like they will post weekly gains for the first time in more or less a month. Like the last few weeks, this week did not play host to too much in the way of economic data. However, it must be said that the past few days brought about a few reports from around the world that were of particular interest to investors.
Right from the onset of today, spot values began increasing dramatically as a result of a policy change announced by the Chinese central bank. Though the overall market is still quite bearish, the last few days and much of this week has shown that gold and silver are not out of the count. Now, with gold approaching the $1,220 level and silver getting closer to $16.50, it will be interesting to see what happens over the weekend and if metals are able to hang on to gains or not.
US Economic Data Comes Back Better Than Expected
Ever since October’s US employment report was made public two weeks ago, the marketplace has not been given much economic data to mull over. On Thursday, however, that all changed as a few key economic reports from the past few weeks and October were made public.
Among these reports was one claiming that factory activity in the Mid-Atlantic United States was on the rise and at its highest level of growth in more than 20 years. Factory data is especially important in the US and had an uplifting effect on US stocks.
In addition, there was a report which held that existing home sales in the US in October exceeded the existing home sales realized at any other point in the last year. With all of this upbeat data making rounds yesterday, it should come as no surprise that gold and silver’s early morning gains were reverted and diminished by the time the day came to an end.
Chinese Central Bank Announces Rate Cut
During the overnight hours of Friday, a report from China indicated that the Chinese central bank announced that they would soon slash interest rates in an effort to spur economic growth. This unexpected announcement is still being digested by the marketplace, but has thus far come to the aid of precious metals as more and more people are acquiring gold and silver as a means to protect themselves from uncertain economic conditions.
As we look ahead to next week, it will be interesting to see what, if any, lasting affect today’s Chinese central bank announcement has on the wider marketplace. In addition to this, the attention of the global marketplace will continue to be paid to the EU region as policy changes are expected to take place there sometime in the near future. The next ECB meeting is scheduled to be held in little more than a week, and at present, many people are expecting to hear of a shift in policy. What kind of impact a policy shift in the EU will have on markets in the US is uncertain, and as such we will have to keep a close eye on any and all economic and geopolitical activity stemming from Europe.