August 13th Early Week Silver Market Update

Gold and silver are posting mixed results during the first half of Tuesday, less than a day after both metals made some solid gains. The losses gold is seeing in the morning hours of Tuesday are ┬ábeing attributed to a corrective pullback, though positive economic news out of Europe and the United States likely did not help either precious metals’ cause. A corrective pullback was more or less expected today as it usually is the day after both gold and silver post impressive gains.

Economic data released early on Tuesday includes a European industrial output report as well as the most recent retail sales report out of the United States.

Retail Sales in the United States

One of the few pieces of economic data which investors were waiting for this week was released in the form of the latest US retail sales report. Retail sales from May to June were reported as rising by .7% while second quarter retail sales came back 1.1% better than retail sales in the first quarter of 2013. This news adds to a recent run of positive economic data out of the US and further bolsters the growing belief that QE will be done away with or at least softened by the end of the 2013 calendar year.

For those who are unaware, QE (Quantitative Easing) is a monetary policy whose main function is to buy bonds and pump paper money into the economy. The more more money in circulation lowers its value and with a lower valued Dollar US exports will become cheaper to foreign buyers. An increase in the demand for exports will then translate into economic growth, or at least that is the plan. Up to this point it is a widely held belief that QE has worked exactly to plan and is no longer necessary in order to grow the US economy.

Now it comes time to play the waiting game in order to see if the next batch of economic data out of the US is positive or negative.

More Upbeat European Economic News

After last week’s run of positive economic data out of Europe, many were confident that this week would bring quite a different story, but such was not the case. Instead, the positive economic reports continued, this time in the form of an increase in industrial production. From May to June, European industrial production rose by around .7% while from the first quarter of 2013 to the second quarter, European industrial production rose by 1.1%.

Apart from Greece, it seems as though the economic outlook for Europe is really beginning to look up.

 

Posted in Market News

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