Gold and silver spot values ended the day just marginally higher than where they began it as Wednesday played host to almost no noteworthy economic or geopolitical developments. In fact, this week as a whole has so far let investors down with regard to the amount of economic data that has been made public. Tomorrow’s release of the weekly jobless claims from the United States is perhaps the biggest piece of economic data due out this 5-day trading session, and that should say sometime.
Last week, on the other hand, proved to be one of the more eventful in the last month or so simply due to the overload of economic data the market was dealt. The European Central Bank meeting, held last Thursday, went exactly as the market had expected it to and saw the ECB introduce new monetary stimulus measures in order to combat growing deflationary pressures. Among the changes made by the ECB was the lowering of the EU refinancing rate by 10 basis points as well as the discouragement of saving through a -.1% deposit rate. This news ended up giving precious metals a slight boost but now, a week later, those gains have more or less been compromised.
The United States employment report for May exceeded market expectations and, as expected, put some more downward pressure on precious metals.
Marketplace Seems Frozen In Time
There have been few trading weeks in recent memory that were nearly as slow as this one has been so far. The lack of inputs is being reflected perfectly in the lazy price movement being shown by both gold and silver. With few major inputs and equity markets around the world continuing to perform well, there is really no saying when gold and silver will ever receive a boost.
This may all prove to be changing as violence in Iraq has been reported as growing more intense by the day. An armed militant group has now seized control of a large Northern part of the country, including a city that is home to more than 2 million people. This news has yet to do much in the way of anything for gold nor silver, but should the violence intensify over the coming days and weeks it will, in all likelihood, encourage some safe-haven buying. Still, it must be stated that these reports are very much preliminary and that the Iraqi military is out in full force actively trying to oust the militiamen.
