Precious metals are posting solid gains on Friday, but it seems as though only silver will be posting weekly gains. The last 5 days have been especially slow due to an overall lack of economic data, but the market still had plenty left to focus on. The eyes of the global marketplace this week were firmly fixated on Europe thanks to Greece’s new government and another round of peace talks between pro-Russian separatists and Ukrainian military forces.
For gold and silver, the middle parts of the week saw more of a risk-on attitude limit any and all gains. Despite a weaker USD giving gold and silver some lift, stock markets around the world performed well enough to keep precious metals’ gains limited, at best.
Ceasefire Agreement Reached in Belarus
Despite the fact that the last few rounds of ceasefire talks have gone nowhere, that all changed this week in Belarus. With leaders from Russia, Ukraine, and a few Western nations present, the terms of a ceasefire were agreed upon by all involved sides; the ceasefire is set to go into effect on Sunday. Upon hearing this news, the market reacted positively and immediately saw equity markets take an upswing.
Now, after a few days of rallying, US equity markets are back to trading near multi-year/record highs while European stock indexes are approaching those very same levels. Clearly, this risk-on attitude, of which seems to be growing by the day, is putting a damper on gains made by metals. As we head into the weekend silver will be looking at modest weekly gains, but gold will have suffered yet another week of losses. With each passing week it seems as though metals are losing out to other asset-classes. Still, with as much volatility as is currently present in the global banking/financial industries, metals are liable to receive a boost at any point in time.
With regard to this pending ceasefire agreement, experts maintain that this simple agreement is not going to be enough to put an end to the conflict in Ukraine. Still, all agree that it is definitely a step in the right direction, assuming the ceasefire lasts more than a few hours.
Weekly Jobless Claims Rise, Retail Sales Fall
Though this week was pretty lackluster from an economic data standpoint, Thursday did bring about a few key reports that were of great importance to investors. First, weekly jobless claims rose significantly and once again eclipsed the 300,000 threshold. Officially, jobless claims came in at 304,000 versus an expectation of right around 285,000. This just adds to a recent string of poor employment data from the United States.
As the year moves forward, you can expect that the wider global marketplace will continue to keep a close eye on how the employment situation in the US pans out. Though the overall outlook is still upbeat, early indications have not led many to believe 2015 will be a great year for US employment.
The other piece of data investors hawked over on Thursday was a retail sales report claiming that retail sales in the US fell by almost 1% from December to January. Add that to the .8% slide we saw from November to December, and you have yourself a pretty lousy last few months for retail stores in the US. Once again, this is expected to change in the near future, but the current outlook remains bleak.
Perhaps, as the uncertainty surrounding the US economy grows, precious metals may derive some sort of benefit. That much, however, remains to be seen at this point in time.