Precious metals are recovering on Friday after spending the three previous days suffering some decent losses. On the whole, this week has been fairly quiet and mostly devoid of any impactful economic data. While that is so, the US Dollar has spent most of the week making gains, and this is not helping gold and silver in the slightest.
As it stands, weekly losses are looking inevitable as metals conceded much of the value gained last week. Currently, the near-term technical advantage gained by metals a week or so ago has evaporated as investors become more bullish on US equities and the US Dollar. Though this week was a fairly quiet one as far as economic data is concerned, the same cannot be said for next week as investors are expecting a good bit of markets-moving economic data to be unveiled.
FOMC Minutes Cause a Stir
Despite there being almost no markets-moving economic data to speak of this week, the market was dealt the minutes from last month’s FOMC meeting on Wednesday. The minutes, which really weren’t expected to be all that important, painted the picture of a Federal Reserve that is rigidly split with regard to when they want rate hikes to ensue.
On one hand, there are members of the Fed who would like to see rate hikes take place this summer, but others still do not think it is appropriate to raise rates until some time much further down the road. Because of these somewhat confusing minutes, the market’s overall outlook on interest rate hikes took a bit of a turn.
You see, after last Friday’s much worse-than-expected employment report from the United States during March, the entire global marketplace became pretty well convinced that rate hikes would not happen until sometime next year. Because of the minutes, and the confusion they offered, however, many investors who last week thought rate hikes weren’t coming until 2016 are now under the impression that they still might happen this summer. It will be interesting to see if the upcoming FOMC meeting offers any further clues into when interest rate hike might take place.
Big Week Ahead
Despite the fact that this week was as slow as they come, the same cannot be said about the upcoming week. Starting on Monday and carrying through the whole 5-day trading session, investors can expect to see a good amount of economic data from the US, Europe, and other parts of the world.
From the US, there is an all-important retail sales report from March that is due out sometime during the midweek. As it stands, investors and market experts alike are anticipating that this piece of data will show quite upbeat retail sales figures from the United States.
Also expected from the United States next week is a report on new housing starts in March. This report is also expected to be generally upbeat and show an improving housing market in the US.
With all of this data on the slate, it is clear to see that next week will be a bit more active than this week was. For precious metals, there is no saying what all this means. If US economic data is upbeat and bests the expectations of the market, I would not be surprised to see the spot value of precious metals continue to tick downward. On the other hand, overly poor economic reports will likely come to the aid of gold and silver as safe-haven assets. For now, however, the outlook on metals is none too favorable, despite today’s decent gains.