May 15th Weekly Silver Market Update

On the final day of this trading week both gold and silver are conceding value. With that said, however, the last week has been extremely beneficial for gold and silver, though gains really happened during but one trading session. This week played host to a good bit of economic data, but most of it came from the same part of the world.

As we look ahead to what the last two trading weeks of May have in store, there is a good amount for investors to look forward to. For one, the FOMC meeting, which is still two weeks away, is beginning to already consume most investor conversations. While the meeting of the Fed is always important to investors, it is seldom this heavily debated so far in advance.

Global Economic Happenings

To start off the week, investors the world over received news of yet another reduction of Chinese interest rates. Last Sunday, the central bank of China announced that it would reduce rates for the third time this year. The Chinese economy has been struggling for quite some time now, and this is just one more attempt on the part of the country’s central bank to spur economic growth. It is still early, so we will have to just wait and see if this move has any realizable impact.

A day later, on Tuesday, the global marketplace focused heavily on a debt payment that was scheduled to be made by Greece to the IMF. The payment, which totaled at multiple hundreds of billions of Euros, was widely believed to be one that Greece would not be able to honor. Much to the surprise of everyone, the payment was made on time and the market’s nerves were assuaged.

Going forward, however, we will continue to keep a close eye on Greece as they have many more debt payments to make before all is said and done. In case you do not remember, Greece missing even one payment may very well result in their exit from the European Union—an event that would take the global marketplace very much by surprise.

US Economic Data Mostly Mixed

This week saw a good amount of economic data dealt by the United States. Before the data was released, investors had nothing more to do than reflect on the past few weeks’ and months’ worth of data that really, in truth, missed the mark by a mile.
Straight off the bat, things did not get any better from a US data perspective seeing as retail sales during April ticked downward slightly from the month before. Expectations were for a rise of .2%, so this report was a major miss. On the same day, the market was dealt a producer prices reading from the US that also failed to live up to expectations. Today brought about even more poor data in the form of downbeat industrial production figures from April and a consumer sentiment that is slowly but surely souring.

The one bright spot, from an economic data standpoint, that we were dealt this week came yesterday in the form of the most recent weekly jobless claims report. Despite expectations for the number of claims to be right around 275,000, the actual figures came back at 264,000. This is not only good news, it marks the third week in a row during which unemployment claims did not exceed expectations. This did not do gold and silver any favors, but also didn’t take away from this being a wholly positive week. The real test will be to see if metals can hang on to this week’s gains through next week.