Precious metals ended Thursday trending downward, though this should not come as too much of a surprise considering the downward-facing posture of metals. On the whole, this week has proven to be very quiet and devoid of all that much economic data. As a result of this, the focus of investors from around the world has shifted towards next week and the plethora of economic activity expected to take place. Among next week’s most notable economic activity is the FOMC’s latest policy meeting.
In new from the geopolitical front, a ceasefire in Ukraine is holding for yet another day. As humanitarian efforts play out in some of the most war-torn cities and towns in Eastern Ukraine, the world has no choice but to look on and wonder if this ceasefire is for real. According to Ukrainian military officials today, Russian troops have moved out of Eastern Ukraine and back across the border. This news is good for the stability of the region, but has stripped precious metals of one of their underlying support buttresses.
Raw Commodities Given Slight Boost on Thursday
Like we have been saying, this week has been unusually quiet and devoid of any major economic activity. With that said, however, today brought about the August CPI report from China, and what it had to say gave metals a bit of a boost. According to the Chinese report, August CPI improved by only 2% on an annualized basis. Compared to a July improvement of 2.3% and an expected CPI increase of 2.2%, the report was on the weak side of things. This led investors to believe that the Chinese central bank may hold up on instituting tighter monetary policy.
Another factor that gave raw commodities a boost was the fact that the UN reported August food prices came in at the lowest in nearly 4 years. It will be interesting to see if all this good news for commodities will at all translate into any gains made, or if the continued progress of the US Dollar will keep making it difficult for spot values to make much of any progress.