For a second consecutive day, precious metals spot values edged higher thanks to some bargain-hunting after last week's significant losses. Though there isn't all that much in the way of market activity today, the gold bulls are out in full force fighting to keep the yellow metal above the key technical level of $1,180/ounce. Should the value of the precious metals continue to grow throughout the duration of the week, investors can rest-assured knowing that the $1,180 level is about as close to the bottom of the market as the metal will head.
In case you missed it, last week brought about the latest employment figures for the United States in September. According to the US Labor Department's report, nearly 250,000 new jobs were added to the economy in September. This is a figure that handily bested market expectations and translated into a stronger USD as well as stronger US equities. Unfortunately for those same asset classes early this week, however, much of the movement has been in the downward direction. This has been enough to see gold and silver make quite significant gains that they are currently still able to hang on to. Whether or not this continues to be the case to close out the week, however, remains to be seen.
IMF Dishes Somewhat Disappointing News
Today, the International Monetary Fund reduced its worldwide economic growth estimate for the year ending 2014. Despite earlier forecasts pitting global economic growth at about 4% for 2014, the IMF revised that forecast downward to just about 3.8% growth. No one was really surprised to hear such news considering the recently weak batches of economic data we are receiving from all parts of the world, but it added pressure to equity markets nonetheless. As a result, physical purchases of precious metals were on the up and up and were a major part of the reason spot values continued to do well on Tuesday.
In other news, this time from Europe, a report indicated that German factory production was down a whopping 4% during August. This number fell far below the expected 1.5% decline in factory output and, as you could have probably guessed, added even more pressure on equity markets. The Euro Zone is continuing to struggle economically, and this is, in turn, bringing down the aggregate progress of the global economy. It will be interesting to see, over the coming weeks, whether or not the ECB does anything to curb growing deflationary pressures across the region.