November 27th Weekly Silver Market Update

Precious metals finished the week moving downward for yet another day. This week, though fragmented, offered up much of the same as far as precious metals are concerned. The fact that so many investors think interest rates will be raised before the end of the year is something that is keeping precious metals subdued. In addition to interest rate speculation, investors are seeing gold and silver suffer from a lack of any fundamental news that might spur safe-haven demand or anything else that would push spot values upward.

Upbeat US Economic Data Reported

Though this week was fragmented due to the US celebration of the Thanksgiving Day holiday on Thursday, there was still some important economic data in play. For one, home prices rose in September at a rate that was far faster than anyone anticipated. This was interpreted as good news as investors the world over are well-aware of the fact that it is going to take strong data on the part of the US housing sector in order to force the Fed to raise interest rates.

In a separate report, third-quarter GDP for the United States was revised upward to show a rise in US GDP of more than 2%. Previous figures had shown that US GDP grew by just around 1.5%, so it is really encouraging to see the figures revised upward. As for how this all relates to interest rate hike speculation, it is safe to say that any upbeat US economic data will more than likely further the belief that interest rates in the United States will be raised before the end of the year.

Turkey, Russia Conflict Takes Center Stage

Another major story from this week was one relating to the Turkish downing of a Russian bomber near the Turkey-Syria border. According to reports, the Russian SU-24 was performing a bombing mission over Syria when it strayed into Turkish airspace and refused to leave. Eventually, scrambling Turkish F-16 fighter jets were dispatched to down the noncompliant aircraft.

This situation seems like a fairly cut and dry one, but when you consider the fact that Russia and Turkey are indirectly fighting each other in Syria, it becomes a bit more interesting. In the immediate wake of the aircraft’s downing, precious metals saw their spot values improve thanks to increased safe-haven demand. This demand was created, in part, due to some belief that the downing of the Russian bomber would become more than an isolated incident. Now a few days later, it seems as though cooler heads will prevail and that no escalation of violence will come as a result of this incident.

Thanks to Thursday of this week being a US holiday, trading through the latter half of the week has been extremely quiet and subdued. People have, instead of going to work, opted to spend many of these days with friends and family, so it is difficult to take anything substantial away from the last few days. As we look ahead to next week and the dawn of December, things are sure to get a good bit more interesting as far as the interest rate hike discussion is concerned. With so many people expecting rates to be risen this month for the first time in nearly a decade, the next few weeks are sure to be exciting. Unfortunately for gold and silver, there is little upside to look forward to so long as rates are expected to be hiked.