Gold and silver have made some solid gains during the early hours of Thursday despite the first half of the week delivering multiple blows to both precious metals. This week has thus far been marked by better economic news out of Europe and contradictory statements from the US Federal Reserve.
A better Purchasing Manager’s Index reading, industrial report, and increased orders for manufactured goods were three pieces of data which shined a much brighter light on the European economy. Unfortunately for precious metals, however, a better-performing European economy means stronger selling pressure. This selling pressure translated into three consecutive days of losses for both gold and silver, though those losses were quickly transformed into gains during the first half of Thursday.
Increased Demand
After the first three days of the week brought the spot value of gold below $1,300 and the spot value of silver below $20, both metals saw a corrective bounce on Thursday. The corrective bounce restored both metals above the thresholds at which they were at before the week started, that means over $1,300 for gold and over $20 for silver.
Coupled with a precious metals corrective bounce was a weaker US Dollar Index, something that is almost always beneficial to precious metals spot prices. Now, investors will wait it out and see if metals will continue their ascent to bring the week to a profitable conclusion.
Chinese Economic Data
The Chinese data which was released after Wednesday markets closed and before Thursday market opened in the US came back as positive for both the Chinese economy and raw commodities.
Despite June’s year to year comparison regarding exports being down 3.1%, July was able to turn things around. From this point last July, Chinese exports are up by over 5% while imports have improved by roughly 11%. These numbers were shocking to market experts, especially after China is coming off a month that was as economically dismal as last June was.
Investors will be hoping that a slow and quiet last day of the week will help gold and silver hang on and maybe even build upon the gains they made today.