Gold and silver spot values, for a third consecutive Friday, are making nice gains as of the writing of this post early Friday morning. The gains being made by metals are being attributed to a policy change being reported out of China, so it will be interesting to see if these gains can be retained or not.
This week, much like the last few, was generally quiet and mostly devoid of any markets-moving economic activity. While normally, this type of quiet market acts as a weight on precious metals, both gold and silver are in position to end the day and week having made some decent gains. Despite the week, as a whole, not bringing about much economic data, Thursday did play host to quite a few reports that grabbed the attention of global investors and took their toll on global markets. From the US especially, the batch of economic data was welcomed by all investors.
US Economic Data More Upbeat Than Anything Else
Only about two weeks ago, investors in the US and around the world were dealt some rather poor US employment data from the month of October. Since this unexpectedly poor report, investors from around the world have not really been given all that much US economic data. That all changed yesterday upon the release of a few key reports from the month of October.
Generally, yesterday’s US economic data was on the positive side of things and ended up giving stocks a modest boost. Unfortunately for precious metals, the upbeat nature of yesterday’s reports ended up turning what was looking like a day of gains into yet another losing day.
One of the most upbeat aspects of yesterday’s US economic data was a report claiming that US factory activity in the Mid-Atlantic region is at its highest level in more than 20 years. In addition to this, there was another report that showed existing home sales during October being superior to existing home sales recorded at any other point during the last year. This news, as any upbeat economic news from the US does as of late, has investors under the impression that perhaps interest rate discussions held by the Fed may be more urgent than they have been in recent weeks.
Another big news story that is just beginning to be digested by the marketplace is the surprising move by China’s central bank to slash interest rates. As is the case whenever interest rates in a prominent economy are slashed, gold and silver responded by making gains and adding value this morning. It will be interesting to see, as we head into next week, what kind of lasting impact, if any, the Chinese central bank’s decision will have on spot values as well as the general global marketplace.