February 19th Weekly Silver Market Update

Gold and silver finished the week making some small strides forward, but the week as a whole did not lend itself to metals’ gains. All in all, the past 5-day trading session (4 day in the United States) was quieter than usual and did not offer up much in the way of markets-moving economic data. Some employment and pricing data was offered, but other than that we saw investors focusing on many of the same factors that have been making a splash across the global economy for the past few months.

A somewhat interesting development that is now almost a week old is the fact that Russia, Saudi Arabia, and a few other oil-producing countries have come to an agreement aimed at drastically reducing the daily output of refined oil. With crude oil prices hitting multi-year lows for the better part of the past 6 months, something needed to be done. Whether this will effectively raise oil prices remains to be seen, but if nothing else it is a start.

Weekly Jobless Claims Fall Again, Consumer Prices Rise in January

Perhaps more important than any other piece of economic data dealt this week was Thursday’s release of the most recent reading on first-time claims for unemployment benefits. Towards the end of January and the beginning of February the US employment sector was showing some very clear signs of weakness. These past two weeks, however, have worked to derail the belief that US employment is once again becoming a bleak facet of the US economy.

After falling by more than 10,000 2 weeks ago, it was reported on Thursday that last week’s reading for first-time claims fell by another 7,000, bringing the seasonally-adjusted average number of claims to 262,000. Towards the end of last week, the number for the seasonally-adjusted average of claims was just under 270,000 and experts expected that to climb. Unexpectedly, this week brought about some good news and it is clear that employment in the US is better now than it has been in more than 5 years. Many are hoping that this will continue, especially as other global economies continue to struggle.

Another report that was dealt towards the end of this week was one that claimed consumer prices rose modestly during the month of January. Though the pricing uptick was nothing major, most experts were anticipating that it would fall. Perhaps even more important is the fact that prices rose across the board as opposed to just one or two sectors rising. Technology, durable goods, and clothing all saw price increases last month, which goes to show that the average American consumer has more money in his or her pocket and is not afraid to spend that money. As we head further into this year, it will be interesting to see if retailers and producers continue to raise prices, or if they will opt for proceeding cautiously due to the unpredictable nature of the global economy.
As we look ahead to next week, a question to ponder is how far gold and silver can run forward. Despite not really gaining this week, it was nice to see precious metals more than hold their own. Now at the helm of some momentum, there is a strong belief that gold and silver can move forward and build upon gains made the last few weeks. If nothing else, metals will continue to benefit from the global economy being as shaky and uncertain as it has been the last few months. There is no end in sight for economic turmoil across the globe, and that seems to lend itself to precious metals making gains.