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October 16th Silver Market Update

Precious metals are backing down from yesterday’s gains, but a number of factors are more than limiting the selling pressure being levied against metals. This week has been mostly quiet, but there are a number of factors that are causing investors to grow increasingly worrisome about the immediate future and what it holds. Despite this week being quiet, there has been a decent amount of markets-moving economic data, especially from the US and Europe.

From Europe, a few reports released earlier in the week with regard to regional industrial production came back far weaker than expected and did well to add fuel to the fire that is worries with regard to deflationary pressures across the region. The eyes of the investing world will now turn to the European Central Bank in order to see what, if anything, they are going to do to both spur economic growth and curb deflationary pressures. Right now, the Euro Zone is in a bit of a sticky situation.

Poor US Economic Data Surprises the Market, Pushes Metals Higher

Despite the chart consolidation we are seeing drive spot values marginally downward today, the precious metals bulls seem to be really gaining some momentum in recent days. Just yesterday, the marketplace was dealt some fairly poor economic data from the US in the form of a downbeat US retail sales report as well as a poor producer price index reading.

According to the data, September’s US retail sales declined by about .3% while the PPI was down by little more than one tenth of one percent. As you could have probably guessed, this news caused equity markets in the US to decline steadily and also piled the pressure on the US Dollar. Today, the USD has rebounded a bit, but equity markets continue to feel a lot of pressure. Perhaps this is a sign that the stock market rally we have witnessed in recent months may finally be coming to an end. Though the value of metals is reeling a bit today, it is clear to see that the selling pressure is limited.

If things continue the way they have been going this week, gold and silver spot values might end up posting weekly gains for a second consecutive week. Still, there is plenty of time for everything to be flipped on its head…again. As we look ahead to Friday and next week, the eyes of the investing world will remain closely fixated on the the progress, or lack thereof, of equity markets. So long as investors are displaying risk-averse attitudes like they have been for the past few weeks, gold and silver are likely going to benefit.