Precious metals spot values have had an interesting week. After beginning things on Monday and Tuesday adding value at seemingly every turn, things have since begun to correct themselves as chart consolidation pulls spot values from this week’s highs. Nonetheless, both gold and silver look as though they are going to post lofty weekly gains by the time the day and week are through.
There was not all that much economic data on this week’s slate, but what little data was made public ended up having a noticeable impact on the market. Data this week came from the US, China, and Japan, and it was mixed in nature. Seeing that gold and silver are both still in good positions, this weekend will be a real test to see if they can retain their current stature or if rebounding stock markets will diminish what was, for a few days, strong safe-haven demand.
Light Week of Data Makes Impact on the Marketplace
On Monday, the market was dealt another batch of poor economic data from both China and Japan. This data, while not the poorest we have witnessed in recent months, was enough to push stock markets across the world downward. US equities in particular declined by considerable margins; enough to scare the world marketplace and increase safe-haven demand for precious metals.
Just yesterday, not only was it reported that retail sales in the US were up, it was also reported that weekly jobless claims were down. In fact, weekly jobless claims came in at sub-300,000 for the 12th time in the last 13 months. This is yet another piece of data that shows just how far the US employment sector has come. As you could have probably guessed, the decreased number of jobless claims coupled with the fact that retail sales were reported as being up helped US equities bounce back nicely a day ago. This, of course, did not help gold and silver out at all.
Crude Oil Remains a Hot Topic
For the last month or more, crude oil has been making headlines in the US and around the world because its value has been on a somewhat consistent decline. Though prices did not slide all that much this week, they simply hovered near a 5-year low. While this news is good for customers at the pump, it couldn’t be worse for energy stocks and OPEC, the world’s largest oil cartel.
According to a report published earlier this week, the current slide in the price of crude oil can be directly attributed to the increase in the extraction of United States oil. With the US hitting the market with more oil than it has ever had before, there is a supply glut that is actively working to downgrade prices.
In addition to there being more oil on the market, oil from the US does not carry the type of premiums you will find on barrels of oil originating from war-torn parts of the Middle East and Africa. So, not only is there more oil, much of the additional oil is available for bargain prices. Should the market continue to stay this way throughout the rest of this month and into the new year, oil and gas prices very well might remain in their subdued positions. For gold and silver, which are commodities, the downward trend of crude oil has not really been too big of a help as far as spot values are concerned.