Gold and silver are both doing well in the early morning hours on Thursday as a decline in Japan’s stock market has done a good job of prompting investors to view gold as a safe haven asset. As of a little past 9AM, gold was up over 20 dollars while silver was currently up over half of a dollar on the day. As of now it seems like gold and silver may be in for a positive finish this week, though we still have just about 2 days left. Apart from Asian stock markets, the eyes of the investing world will be on the United States as a few economic reports are set to be released on Thursday.
Asian Contraction
Over the course of the past 3 weeks to a month, Asian stock markets have been performing at levels we have not seen for over half of a decade. This incredible run of form did a good job of destroying demand for gold as investors took their funds away from safe-haven assets and pushed them towards riskier investments that they hoped would pay off handsomely in the short-run.
After a few weeks of economic bliss, Asian stock markets, specifically that of Japan, lost inconceivable value on Thursday, and over the course of the past week. On Thursday alone, Japan’s Nikkei Index fell to the tune of about 5%, which brings the weekly decline up to around 15%. As we would have expected from such a large drop in the value of Asian stocks, safe-haven demand for gold improved dramatically.
Europe and US Economic Data
European stocks have shown mixed results on Thursday, though a more positive economic report did a good job of saving European stocks from a complete downturn.
Some US economic data will be watched over by the eagle-eyes of investors on Thursday including the 2nd quarter GDP reading as well as the weekly jobless report. Second quarter GDP is anticipated to show over 2 percent in yearly growth, while the jobless report is up in the air at this point.
With the future of monetary policy in the United States seemingly hinging on the next few weeks worth of economic data, investors will be eyeing these reports with inordinate scrutiny. Whether that is a good thing for precious metals investors has yet to be seen. A lot of things indicate that the US economy has recovered substantially from where it was at 2 years and even a year ago, though many are skeptical as to whether this improvement can and will be sustained or not.
Price Movement
Since the US took the day off on Monday in order to celebrate the Memorial Day holiday, gold opened Tuesday at about $1,395, and at almost 10Am on Thursday it was sitting at $1,414. This is a gain of almost 20 dollars on the week.
Silver opened Tuesday at $22.70, and in the morning on Thursday was sitting at about 23 dollars even. This constitutes a weekly gain thus far of about 30 cents. You have to keep in mind that while these numbers may not impress you, once markets opened on Tuesday both metals declined in value significantly, so $20 and 30 cent weekly gains are actually a testament to how well precious metals have done this week.