January 14th Midweek Silver Market Update

Precious metals are posting mixed results as of the writing of this post Wednesday afternoon, but have spent the early parts of this week making gains. Metals have done so well simply because investors are growing increasingly worried about the progress, or lack thereof, of the global economy. Recently, pieces of economic data as well as the performance of equities has come into question, and this uncertainty has driven a large number of investors to safe-haven gold and silver.

This week has brought about a good amount of economic data, and is expected to continue doing just that. Much to the dismay of investors, however, most of this data has been sub-par in nature and is only making the overall outlook on stocks that much bleaker. This, of course, is upbeat news for precious metals. As we head further into this week, it will be interesting to see if gold and silver can retain and possibly even build upon today’s gains, or if profit-taking and/or a corrective pullback will push spot values back downward.

Poor US Retail Sales Pushes Stocks, the Dollar Downward

US equities have not fared well at all this week, and thanks to a new retail sales report will likely do even worse. According to the most recent US retail sales report, retail sales in the United States fell in December by .9% on an annualized basis. This report was unexpected simply because December is a holiday month where a lot of shopping happens.

Making matters even worse for equities is the fact that crude oil continues to hover near multi-year lows. Now hovering around a 6-year low, crude oil is beginning to really drag on equities, and particularly energy shares. In fact, stock indexes are doing particularly poor all over the world, not just in the United States. Because of this recently poor performance on the part of equities, we are seeing investors more readily flee to safe-haven assets like gold and silver as a means of protecting their wealth.

As this year moves on, it will be interesting to see how equities perform and how their performance relates to gold and silver spot values. For now, the downward movement of equities has come to the aid of precious metals and has helped them kick this week off in impressive fashion. Now, the attention of the marketplace is beginning to shift to next week’s ECB meeting, when investors are expecting to hear more information regarding the future of monetary policy across the EU.

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