August 15th Weekly Silver Market Update

Precious metals did not exactly impress this week as a slow week of data ended up taking its toll on spot values. In total, there were very few massive pieces of economic data, but because of the general lack of data investors have been honing in on fringe reports more than they would at most other points in the year. Still, so long as market conditions remain flat and stagnant, precious metals are constantly under threat of being pushed lower and lower.

There was a big focus on the crude oil market this week, and this ended up not being such a good thing for metals.

Crude Oil Called Into the Spotlight

From the early parts of this week through the last day of trading there was constant talk about crude oil. The first splash made by crude came as a result of an oil stockpile report from the United States. To make a long story short, the US currently has stockpiles of crude oil that far outpace what experts had believed to be in stock. This sent the value of crude oil shooting downward as the same oversupply worries are beginning to creep back in.

From then on, the week became more positive for crude oil. This is so because there were rumors which were later confirmed that held that OPEC would be meeting next month to once again discuss the possibility of member-nations reducing their daily output of crude oil. Even though similar meetings have ended up being mostly fruitless in the past, comments from Saudi Arabia’s energy minister seem to have given some folks that this time around will be different. With some people believing that OPEC will end up stabilizing the crude oil market, the spot value of the commodity rode these comments to a positive end of the week.

Also giving oil a marginal boost was a massive fire that broke out in Louisiana at an oil refinery. The first has since been extinguished, however it did well for crude oil on Thursday because it scared investors into a corner and forced them to make safe-haven investments in crude.

US Economic Data Dealt

The biggest piece of US economic data that was dealt this week came in the form of a productivity report from the second quarter of this year. Unfortunately, this report marked the 3rd consecutive that was far worse than expectations. What’s more, it was the 3rd consecutive US productivity report that showed a decrease in overall productivity. This news did help precious metals a bit, but it was never going to be enough for metals to be pulled out of the red.

On Thursday, the weekly jobless claims data was dealt and showed that last week saw 1,000 fewer applications for unemployment benefits than the week before it. This brings the seasonally-adjusted average number of claims down to 266,000. So long as this figure remains below 300,000, investors and market experts are going to look at the US job market positively.

Is a report like this going to be enough to spur the Fed into raising rates sooner than later? Probably not. But it does do well to show that the US economy is still performing well and, realistically, outpacing most of its rivals. The US Dollar did well in the beginning of the week and this is just one more thing that weighed on precious metals. As we look forward to next week, there is a strong likelihood that it will, in many ways, mimic what we saw these past 5 days. Being that we are in the middle of the summer, there really isn’t all that much action to talk about.