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August 6th Early Week Silver Market Update

Gold and silver suffered losses in the early parts of this first full week of August mostly thanks to positive economic news stories from around the world. Due to the fact that this is the time of year when most people travel on their family vacations, the overall trading atmosphere has been subdued to say the least. With few major events in the news able to push gold and silver dramatically in one direction or another, investors instead will latch on to smaller economic news stories.

Gold has finally dipped back below $1,300 while silver is back down under $20 for the first time in a few weeks. It will be interesting to see how gold and silver react throughout the duration of the week.

Positive European Economic Data

Gold and silver were likely hurt by the latest PMI reading which was unleashed to the general public on Monday, a reading that suggested the European economy might finally experience some growth. Over the course of the past few months, the only economic news stories coming out of Europe were negative and suggested that the overall EU economy was experiencing moderate to sever contraction. Yesterday's PMI reading, which jumped over the 50 threshold, finally suggested that the European economy has been and will continue to experience growth.

Today's European economic news goes hand in hand with yesterday's as it was reported that manufactured goods orders rose considerably from May to June. Actual manufactured goods orders rose by nearly 4% over this time period, a huge increase from a report that has, over the past few months, been showing signs of negative growth.

Other World News

Despite the spot values of gold and silver dropping in the wake of more positive economic reports from around the world, the US Dollar Index has not jumped on the opportunity to make gains like many would have expected. Instead, the USD Index is currently hovering around a 5-week low and is losing more value as we speak.

In other news, the Reserve Bank of Australia reduced its primary interest rate by one quarter of one percent, dropping it now to 2.5%.

As spot values of gold and silver continue to fall, we will be monitoring physical demand for both gold and silver in order to see if there is any uptick. If recent history is any decent predictor of the future, however, it is unlike that demand for physical gold and silver will shoot up any time soon.


Posted in Market Updates

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