Gold and silver saw some gains in the early morning hours on Thursday as Japan’s stock market finally stopped doing so well. With the Fed’s announcement that Quantitative Easing the US possibly coming to an end in the next few months, it is unlikely that gold and silver will be able to sustain the positive gains we saw early in the morning on Thursday. Once again the marketplace is being as confusing as ever forcing investors to be on their toes now more than ever.
Japan Cools Off Momentarily
The US stock markets ended the day in disappointing fashion on Wednesday, and because of this the Japanese NIkkei index fell quite a bit on Thursday. As you would expect from a decline in the Japanese stock market, the Yen was able to gain in value, even if by only a little bit.
In addition to Japan’s stock market not doing so well on Thursday, European stocks were down as well. Do not expect this situation to linger for too long because the way Japan is devaluing their dollar, gains for the Yen will be few and far between. Perhaps something else that brought down stocks across the world was yet another slate of disappointing economic data out of China.
Though the US Fed’s announcement that QE might be ended sometime shortly down the road was negative for precious metals initially, it did not have the long-lasting negative effects that people had anticipated.
Weak Chinese Data
Something that was anticipated by all types of investors since Monday was the release of the latest Chinese manufacturing data. Lately, China has been severely under performing economically which has led many to question whether or not their economy is as strong as it was only a few years ago.
The data that was released on Thursday indicated that manufacturing in China has contracted instead of grown. Because of this data and all the declining stock markets on Thursday, gold was looked at as more of a safe-haven asset which prompted a decent amount of demand. Do not expect gold to continue to appeal to investors as a safe-haven asset because stock markets have been performing incredibly well lately, taking investor interest away from precious metals.
Price Movement
Gold started the week with an opening value of $1,365, and by about 11:30 on Thursday was up to roughly $1,380. This marks a current gain of about $15. Silver started the week at $22.42 and by Thursday it was sitting at $22.33. This was a minor loss of about 9 cents.
Gold is currently posting positive numbers for the week, but myself and many others are skeptical that these positive numbers will remain by the end of the day on Friday.