July 30th Midweek Silver Market Update

Precious metals have spent most of the day trading lower as a result of some upbeat US economic data and earnings reports. While the most recent GDP report for the US was made public this morning, the focus of investors now turns to the conclusion of the FOMC’s latest meeting and post-meeting statement expected to be made by Janet Yellen.

In addition to all this, there are still a plethora of geopolitical situations for investors to pay attention to. As pro-Russian rebels and Ukrainian forces fight more fiercely near the city of Donetsk, citizens of the city are growing increasingly concerned for their lives, others feel stranded. In Gaza, continued Israeli air and ground strikes have now claimed the lives of more than 1,300 Palestinians. While it is still unclear how either of these two situations will play out, what is clear is that the duration of this week and month will be unusually busy for the middle of summer.

Upbeat US Data Boosts Equities

Shortly after US markets opened today, Twitter saw the price of its shares rise by more than 20% on the back of better than expected earnings for the second quarter of this year. As a result, Twitter executives also boosted their sales forecast for the rest of 2014. While this data did boost US equity markets, the better than expected GDP report released shortly thereafter boosted them even further.

Officially, it was reported that the US economy grew by 4% on an annualized basis in the second quarter. This news more or less reaffirmed the widely circulated belief that the US economy is only growing stronger by the month. Of course, all this data worked to devalue precious metals across the board.

As we head into the final two days of the week, the attention of investors will remain on today’s data but will slowly but surely shift to Firday’s release of the latest US job growth figures for July. After the month of June saw more than 280,000 jobs added to the US economy, preliminary expectations hold that July’s job growth will be somewhere in the neighborhood of 230,000. If the figures meet or exceed expectations, I think it will have a negative impact on precious metals.

Also surging forward today was the US Dollar, which has improved consistently for the past month or so. With the EU continuously loosening monetary policy, the greenback is likely to do little else besides gain against the euro currency. It will be interesting to see if the Dollar can continue to keep up such robust performance over a more extended period of time.

Posted in Market News

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