July 31st Silver Market Update

Precious metals spot values are continuing to trend downward as this week’s slate of US economic data has thus far done little in the way of uplifting gold and silver. Just yesterday, the FOMC concluded their most recent policy meeting, though what they had to say was none too surprising for investors to hear. From an economic standpoint, this week is still far from over as a few key employment reports are going to be made public before the end of the week. In addition to all this, there remains quite a few geopolitical events catching the world’s attention.

FOMC Meeting, Jobs Data Pushes Metals Downward

Yesterday brought about the conclusion of the Federal Open Market Committee’s latest meeting, though what they decided had very little impact on the market. As expected, the Fed decided that they are going to continue tapering Quantitative Easing en route to being completely done with the bond-buying program by sometime this upcoming Fall. What’s more, they reiterated that interest rates in the US will remain at current levels for a “considerable” amount of time.

Today, the US economic data continued, this time in the form of the best month of unemployment insurance benefits in more than 8 years. With fewer Americans seeking unemployment benefits, it is becoming increasingly clear that the US economy is slowly but surely improving. Now, the attention of the market has shifted to tomorrow’s employment report for July. With preliminary expectations of at least 230,000 jobs being added to the economy this month, it is clear to see that people are beginning to uplift their expectations for the US economy’s growth.

As you could have probably guessed, all this upbeat US economic data is only working against the short and long-term outlook on precious metals. As investors see more readily a strengthening US economy, their appetite for riskier, potentially more profitable investments will naturally grow. As this happens, buying interest in precious metals will be delivered a massive blow. If interest rates are, in fact, raised within the near future this could spell even more trouble for gold and silver, both of which have had a pretty tough month of July.

Still, while the US economy has been improving over the past month or so, geopolitical tensions around the world have been on the rise. If violence and general uncertainty abounds in the marketplace, safe-haven precious metals acquisitions may be enough to at least partially offset losses incurred as a result of the improving US economy.

Posted in News

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