October 10th Weekly Silver Market Update

Precious metals are holding steady to slightly lower to close out the week, but all in all, this 5-day trading session was one of the best metals have seen in more than a month. There wasn’t all that much data made public, but what data hit the market did give gold and silver a noticeable boost.

Some European economic news hit the market earlier in the week, and as has been the case for the past few months, it was almost wholly bad. German factory output for August was one of those reports, and the data showed a 4% decline from July to August. Market experts were expecting to see the data back-track, but no one was expecting such a drastic shift downward. Now, the wider marketplace is wondering what the European Central Bank will do to fight the rising deflationary pressures that seem to be plaguing the Euro Zone.

Fed Minutes Catch the Market’s Attention

The first few days of this week saw investors from foreign markets mulling over and reacting to last Friday’s upbeat employment report from the United States. As a result, US equities as well as the US Dollar began moving upward after a relatively volatile few days of trading.

By Wednesday, however, the volatility was a theme again in equity markers as US equities in particular swung drastically throughout daily trading sessions. By midday on Wednesday, things began to really become sporadic due to the release of the FOMC’s minutes from last month’s meeting. As has been the case in recent months, investors from around the world are looking to the FOMC to provide a timetable with regard to when interest rates will be raised. Unfortunately, however, no such timetable was provided.

What investors did find out, however, was that the Fed may be forced to hold off on hiking interest rates until next Fall, as opposed to earlier projections which held that interest rates might be risen sometime in June or July. Members of the Fed cited weakening economies in Europe and Asia as part of the reason behind why interest rate hikes might need to be delayed. Other members pointed to the US Dollar’s recent rally as potentially having a negative affect on US economic growth months down the road. Despite the labor market’s continued improvement, it still seems as though interest rate hikes in the US are a long way away. As a result of this spreading belief, investors flocked to US treasuries, the US Dollar, and, of course, safe-haven precious metals. The safe-haven demand coupled with bargain-hunting buyers was enough to propel the spot values of gold and silver to their first weekly gains in more than a month.