Gold and silver are trading lower for the third consecutive day on Thursday, thanks to many of the same factors that have been putting downward pressure on spot values all week long, profit-taking and a mild technical correction. Though this week has been one of light economic data, today was a bit of a different story for investors in the US. There was more than solely US economic data on the table today too, as some manufacturing reports from China made their way to the public during the overnight hours.
Despite the last few days’ worth of declines by precious metals’ spot values, most market analysts are in agreement that gold and silver still have the near-term technical momentum. As we head into the final day of the week, investors will be curious to see if precious metals can turn things around in order to end this 5-day trading session on a positive note.
Thursday’s Economic Data From China and The US
As far as economic data from the United States is concerned, today was full of it. In addition to the weekly jobless claims report, investors were also greeted with the flash PMI manufacturing report, Consumer Price Index report, and the most recent real earnings report, to name a few. In all, the reports were a mixed bag, some beating market expectations and some others falling just short. The one piece of data worth talking about, the weekly jobless claims report, ended up working against precious metals and aiding the USD. In case you couldn’t have guessed, weekly jobless claims were down for the first time in a few weeks.
China, which has been yielding a plethora of positive economic reports as of late, reported a downtrodden preliminary manufacturing PMI for February. The preliminary Markit PMI reading for February was barely over 48, down significantly from January’s reading of 49.5. This preliminary report is important for investors due to the fact that any reading under 50 suggests that that sector of the economy is experiencing a period of contraction. As is always the case when the market is greeted with sub-par economic news from China, this PMI reading ended up putting downward pressure on gold and silver today.
As it stands, this week is shaping up to be one of slight losses for precious metals. After continuing their rally to open up the week, both gold and silver quickly began feeling the pressure of shortsighted, profit-taking investors as well as a technical correction. Nonetheless, gold is still above the $1,300 threshold and silver is very near $22/ounce.