August 8th Weekly Silver Market Update

Precious metals are trading slightly lower today in response to some upbeat economic data from the United States. With that said, it is becoming clear that the selling pressure is extremely limited due to the market’s continued focus on geopolitical happenings from around the globe. In truth, this week was fairly quiet due to the fact that there was not nearly as much economic data made public as there was a week ago. As we look ahead to next week, it is highly likely that the market will continue focusing on the plethora of geopolitical developments taking place in various parts of the world.

Geopolitics Takes Over This Week

For the better part of this week, investors’ decisions were based primarily upon what they saw from US equities as well as the crisis happening in Ukraine. Despite the crisis in Ukraine being in and out of the news for a majority of this year, investors began focusing on it once again this week because it was reported that thousands of combat-ready troops were massing along Russia’s Western border with Ukraine. By midweek, NATO had confirmed that more than 20,000 Russian troops were stationed just across the border with Ukraine. At this point, there is no real way of telling if the increased military presence near Ukraine will translate into Russia involving itself in the Ukrainian crisis or not, but their actions will definitely continue to catch the attention of the investing world.

Also in the news from Europe this week was some disappointing economic data. Earlier this week it was reported that Italy’s economy experienced recession during this year’s second quarter. Making matters worse, a subsequent report indicated that June played host to the fewest number of German industrial orders in more than three years. This news did well to pressure EU stocks as well as the Euro currency. Over the course of the past month or more, the US Dollar has made almost non-stop gains against the Euro. So long as the European Central Bank continues to loosen monetary policy, the Euro will likely only continue to become devalued. This will cause the US Dollar to continue making gains, especially if the Fed raises interest rates and further tightens monetary policy like they have been doing for the past few months.

Looking ahead to next week, it is likely that things will be fairly quiet, at least from an economic data standpoint. Being that we are now heading towards the middle of August, many investors and businessmen are taking time off for vacations and family time. As such, things may remain fairly quiet for the foreseeable future.