December 25th Weekly Silver Market Update

Gold and silver are both looking like they will finish the week having made gains, but those gains are going to be small and unlikely to be sustained. This was a slow week of holiday trading, but the marketplace was dealt a good bit of US economic data. Unfortunately, because this week was so slow, it is difficult to know how investors feel about the data that was dealt. All in all, however, there is no denying that the data was less than impressive.

This week was slow, but it is looking like next week will be as well seeing as the New Year’s holiday occurs towards the end of the week. In the current market atmosphere, a slow week of trading is, nine times out of ten, not something that lends itself to gold and silver making gains. This week was an exception, of course, so it will be interesting to see how things go during next week’s trading session.

US Dollar Has December to Forget

If you thought that this past month was poor for the US Dollar, you are not too far off. In fact, you are spot on in that thinking due to the fact that December saw the USD lose value for the first time since last April. Despite the month not being quite finished, the fact is that we are not likely to see the Dollar make any great recovery over the course of the next week or so.

While this month was poor for the greenback, the longer-term outlook for the Dollar is anything but that. With the prospect of further interest rate hikes still on the minds of investors everywhere, it is looking like the Dollar will do quite well during 2016. As it stands, there are many people who believe that the Federal Reserve is going to increase interest rates up to four more times during the year. Of course, these increases depend wholly on how well the US economy is performing. Right now, the US economy seems to be in the middle of a slow patch, evidenced by this past week’s worth of economic data.

Home Sales Data Delivered

Another key aspect of this slow week of trading was the surprising quantity of ecomomic reports that were dealt. First in line was the report on existing home sales during the month of November. According to the Commerce Department, existing home sales in November came back 10% weaker than they did during October. This data flew in the face of expectations, and was quite disappointing. While this is so, the National Association of Realtors was quick to point out that a new rule pertaining to the acquisition of mortgages was likely to blame for the slow month. They expect that, as people become accustomed to this new rule, sales figures will normalize.

In a report released just a day later, the Commerce Department showed that new home sales were on the rise during November, though only by margins smaller than what were expected. Still, it is nice to see that the housing market did not completely backtrack during November, but rather partook in a bit of a temporary pullback.

In other news, it was reported that November saw a surprisingly small number of durable goods orders. Though many sectors of this report showed growth, the number of orders submitted for non-military aircraft dropped off significantly and that is a major part of the reason the whole tone of the report was negative. As we move into the New Year, US economic data will be closely eyed in order to gauge whether recently poor data is an undertone for the future, or something that can be explained through slow, year-end trading.