Precious metals began the day trading sharply lower, but by the time things were all said and done, most of those losses were parred. This week has thus far proven to be particularly quiet, mostly thanks to a lack of any major pieces of economic data. Though a few US housing reports were released during the first half of the week, the impact they had was momentary at longest. As we look ahead to next week, I anticipate that the attention of the investing world will remain fixated upon the progress of US equities as well as the US Dollar.
Earlier this week, it was reported that the United States had begun commencing airstrike operations against ISIS targets in Syria. Though this news was not too unexpected, the fact that the US is now bombing in Syria, and not Iraq, caused the market to become a bit cautious to begin the week. As a result, precious metals did not fare too badly at all through Monday and Tuesday. It will be interesting to see how the United States’ involvement in Syria unfold over the coming weeks, but for now the situation is being mostly ignored by the market.
US Housing Data Lifts Equities, the US Dollar
To begin the week, investors were dealt a US housing report that indicated existing home sales in August came back far worse than expected. In fact, the numbers were so dismal that August was the first month where exiting home sales did not improve upon the month before it. This news, as you could have probably guessed, ended up working completely and totally against equities as well as the US Dollar.
Yesterday, however, the outlook on equities and the Dollar improved a bit once it was announced that new home sales in August were far better than expected. This report gave equities and the greenback a bit of a boost while simultaneously putting gold and silver under even more pressure. That pressure continued into today as metals began the day posting heavy losses. Fortunately, bargain-hunting buying was able to save the day for gold and silver as losses could have been much more significant than they actually were. Unfortunately, however, the long-term outlook on gold and silver as investment options seems to be growing increasingly bleak as the market grows more certain of the imminent interest rate hike that is expected to take place in the US before long. Though this week was quiet, it will be interesting to see how the next few weeks unfold, especially as it relates to precious metals.