Spot values are continuing to edge downward on the final day of what has proven to be a fairly quiet week. On the whole, there wasn’t much economic data made public, but what little data did hit the market had somewhat of an impact. We also saw a momentary focus shift in the form of investors from around the world paying attention to a new batch of airstrikes in Syria. Like most things this week, however, the attention being paid to the events in Syria faded as quickly as it appeared.
Looking ahead to next week, I imagine that the focus of the marketplace will continue to be on the progress being made by US equities as well as the US Dollar. Both of the aforementioned assets have been moving higher and higher over the course of the past few months, and look as though they will only continue to add value. It will be interesting to see if precious metals will be able to put up a fight against equities and the greenback, or if this bearish market will continue to pile on the selling pressure.
Earlier in the week, investors from around the world grew a bit concerned as a report from the United States with regard to existing home sales fell far short of expectations. This news initially drove down the value of US equities and the Dollar, but by midweek, all that had changed. The reason for this is due to the fact that a report on new home sales in the United States came back far better than expected. This news prompted the US Dollar to surge to a 14-month high during the middle parts of the day on Thursday. What’s more, the upbeat data also had a positive impact on the three major US stock indexes.
Over the course of the last 2 to 3 months, the greenback has been making almost incessant gains against rival currencies such as the Euro and Japanese Yen. Due to the diverging monetary policies employed by US and other world central banks, most experts agree that the current upward trend of the Dollar and the current downward trend of the Euro will continue for the foreseeable future. For precious metals, this is absolutely terrible news due to the fact that the greenback is one of gold and silver’s biggest opponents at present. Unless there is a major shift of the market atmosphere, I anticipate that it will continue to be difficult for precious metals to make gains, and even more difficult for them to retain said gains. With that said, however, anything can happen over the course of the coming weeks and months.