Gold and silver experienced mixed fates this week as gold made small gains and silver posted some modest losses. The two most important and watched news stories of the week included economic data out of China and the Chairman of the Federal Reserve addressing the US Congress. As you can already tell from the minor movement gold and silver experienced, neither of these stories pushed either metal heavily in one direction or another.
The US Dollar Index fluctuated all week long and while one day it was up and wreaked havoc for gold, the next day it was down. This meant for an uneasy trading atmosphere for a large part of the week.
Chinese Economic Data
Seeing as there was little to no economic data released over this past weekend, investors and market watchers were chomping at the bit to get their hands on the Chinese GDP report that was due out on Monday. The news, as a whole, was a bit disappointing, but in reality the Chinese economy on a bad day is better than most others on a good day.
The first piece of data from the GDP report indicated that, on an annual basis, China’s GDP rose by 7.5%; a number that was about what most experts had anticipated. While that news wasn’t so bad, it was concerning to other investors that this past quarter was the second consecutive one where the Chinese economy experienced contraction.
Industrial output from China rose by about 9% in June, which was surprisingly a smaller increase than what was anticipated. Though it is clear that the Chinese economy is not booming like it was only a few years ago, the Chinese are not in as bad of shape as some people have been thinking.
Bernanke Addresses Congress
Apart from the Chinese data that was due out on Monday, investors were looking forward to the Federal Reserve Chairman, Ben Bernanke, and his addressing the US Congress on Wednesday and Thursday.
First up was the House of Representatives on Wednesday where Mr. Bernanke declared that monetary policy, specifically Quantitative Easing, is by no means on a preset course to being “wound down” or done away with by the end of 2013, contrary to many rumors. In fact, Bernanke said that if the US economy were to take a turn for the worse in the coming months, him and the rest of the Fed would have no reservations regarding boosting monthly bond-buying (Quantitative Easing).
While this news was initially taken as bullish for gold and silver, Bernanke’s Q&A session after his speech managed to revert all the gains gold and silver had made in the morning. All in all, the news was taken in and mixed reactions by the marketplace in general were yielded.
Demand for gold and silver was reported to have increased in Asia over the past week or so. This is good news considering Asian demand for gold and silver was at puzzling lows.
Weekly Move
Gold opened up the week at $1,286 and by closing time on Friday it was sitting at $1,295.
Silver, on the other hand, started the week at $19.98, and by the end of the week had dropped to $19.58.