December 11th Weekly Silver Market Update

Precious metals concluded a fairly lackluster week by stacking on moderate losses on top of already moderate losses. To be fair, the quiet nature of this 5-day trading session was always going to see precious metals concede value simply because market conditions are wholly stacked against both gold and silver. Barring any drastic change in the tone of US and global economic data, the spot values of gold and silver are likely to continue falling or, if nothing else, struggling to make gains.

Looking ahead to next week, the investing world is already concerning itself with the Federal Open Market Committee’s monthly policy meeting. This is the case because most global investors are under the impression that next week’s meeting will bring about the first US interest rate hike in more than 8 years. Though we have thought this same exact thing many times in the past, it feels as though this time might actually see rates be pushed upward. For most, it is not a matter of if rates will be raised, but rather a matter of when they will be raised.

Chinese Data Continues to Come Back Poorly

On the whole, this past 5-day trading session did not offer up much in the way of markets-moving economic data. With that being said, China did play host to a few economic reports that caught the attention of investors, mostly because of how poor it was. On Wednesday, the Chinese government announced that November exports fell on an annualized basis by almost 4%. The fact that exports were down was bad enough, but the bad news was two-fold as November marked the 5th consecutive month where exports moved backwards.

The same problem that has existed for a while now continues to persist, and that is the problem of a Chinese economic slowdown negatively impacting the growth prospects for the world’s other major economies. This continues to be an underlying concern for investors, and has threatened the likelihood that the Fed will hike rates.

Weekly Jobless Claims Data Eyed

The only big piece of US economic data worth mentioning was released on Thursday in the form of t he weekly jobless claims report for the United States. Despite it being widely believed that last week’s claims for unemployment benefits fell from the week before it, the raw data showed that the opposite had happened. According to the US Labor Department, 13,000 more claims for unemployment were filed last week. This flew in the face of expectations that the number of people seeking unemployment would fall by more than 5,000.

This data, though poor, did not do much in the way of swaying the opinion of the marketplace as it relates to the possible hiking of interest rates that we are expecting will be announced next week.
The US Dollar Index even managed to gain on Thursday, which is a clear sign that investors mostly overlooked the weekly jobless claims data.

Another key happening of the week was crude oil’s price action. For much of the week, the leading commodity backed down towards and even reached 7-year lows, with the price of a barrel of oil falling below the $37 threshold. So long as crude oil is kept subdued and moving downward, it is going to be extremely tough for gold and silver to make gains. This is so because precious metals often have their price action dictate by that of crude oil. As we move forward through December and into 2016, popular opinion is that the price of oil is not going to make a sustained rebound anytime soon. This is especially true is Iranian oil embargos by Western nations are lifted, something that still remains a very real possibility.