Precious metals began the day more or less steady, but by mid-morning were given a boost thanks to some weaker than expected economic data from the United States. On the whole, the first half of this week has been pretty slow simply because there hasn’t been all that much markets-moving economic data on the table, and because the US and Canada were celebrating holidays on Monday. To be honest, the rest of the week is also looking like it will be slow, though plenty of attention will be paid to the movement of US equities.
Earlier in the week, on Tuesday, the market was dealt a small slate of economic data from the European Union, and as you could have probably guessed, it was across the board negative. From Germany, the region’s leading economy, it was reported that industrial production continues to be poorer than it should be. As such, it should come as no surprise that another report, also released on Tuesday, showed that overall EU industrial production has been and continues to be poor throughout 2014, and specifically 2014′s third quarter.
Poor US Economic Data Surprises Market
Shortly after US markets opened for trading today, the spot values of precious metals were moving mostly sideways and remained unchanged from yesterday. Shortly thereafter, however, a few economic reports were made public, and they caused the value of metals to shoot upward.
According to the reports, US retail sales for September declined by about .3%, which is a far more severe decline than expected. In addition to this, it was reported that the month-on-month producer price index fell by .1% when most experts were expecting a slight increase. Due to this downtrodden data, the value of the US Dollar as well as most major equity markets took a sharp dive. This increased the growing risk-averse attitude currently plaguing the market and, in turn, caused the value of precious metals to move forward.
As we head into the last few days of the week, I anticipate that investors the world over will continue to keep a close eye on US equity markets as they have been the home of some severe volatility in recent weeks. Such volatility has a large number of investors convinced that perhaps US equities are gearing up for a shift downward. We will keep a close eye on markets over the coming days and weeks to see if there is any truth behind this growing belief.