Gold and silver were looking to have positive weeks by the end of the day on Thursday, but with the news Friday brought, metals almost immediately did away with all their gains. Troubles throughout Europe and Asia were also mainstays in the headlines this week, though these stories helped precious metals more than they hurt them. I suppose we will have to wait yet another week before we see gold rise above the $1,400 mark even though most people would have bet money on this week being that week.
Economic News Out of the US
A few weeks ago it was announced that the US’ current monetary policy, known as Quantitative Easing, has a strong likelihood of being done away with sometime this summer. The cryptic announcement which offered no real timeline means that investors and market watchers are going to be hanging on every bit of economic data coming out of the US for the foreseeable future.
This week marked the announcement of what many have been calling the most important economic report in years in the form of an employment report. Data from this report was expected to be positive with an increase of 170,000 non-farm jobs to be added in May while the unemployment rate was expected to remain put at 7.5%. The actual employment report was not too far off from expectations as 175,000 non-farm jobs were added in May.
This news almost immediately hit precious metals fairly hard as they both lost all of this weeks gains and then some. What looked like it was going to be a positive week for gold and silver has quickly turned around into quite the opposite.
European and Asian Disappointment
Over the course of the past few months you have probably noticed a regular pattern of disappointing economic outlooks from Europe. This week was no different as the whole eurozone seems to be suffering. With a European Central Bank meeting this week, many had hoped that some of the seemingly countless problems would be addressed. Instead, the ECB meeting brought with it no major monetary policy or interest rate changes. In fact, not even a minor announcement was made in regards to doing something about the state of the eurozone economy.
As we receive report after report of European economies likely contracting for the rest of 2013, it seems as though European leaders are content to let whatever happens happen. This has got to be irritating to the many people that live throughout Europe who are suffering due to their leaders’ inaction.
Japanese and Chinese markets also suffered this week as the Japanese Nikkei Index was in free fall for a large part of the last two weeks. Over that course of time the Nikkei Index lost about 18% of its value which is very worrying to anyone who has interest in or has invested in Asia. China followed the same path as Japan, but its market losses were not nearly as drastic.
The Week Ahead
As we look ahead to next week, there are very few huge headlining stories to look forward to. While some US economic data will be on the table, it is not expected to move the precious metals market too much. Other than that we will fixate our attention on both the Japanese Nikkei INdex as well as the US Dollar as both entities are important to watch when analyzing precious metals movement.
Weekly Shift
Gold started the week at $1,391 and on Monday many were hoping that the metal would eclipse the $1,400 mark for good this week, though those hopes were dashed early on Friday. When all was said and done gold finished at $1,383 , a loss of about 8 dollars.
Silver started the week at $22.33 and at the end of the day on Friday was at $21.69.