Precious metals began the day trading near even, but after the release of some economic data during the mid-morning hours, spot values received a noticeable boost. Through the first 2 and a half days of this week, the overall global marketplace has been particularly quiet and free of any noteworthy economic data. Though some data was made public out of Europe, it did not do much in the way of surprising anyone.
According to the data, industrial production in the Euro Zone’s leading economy, Germany, was down and continues to be down through the 3rd quarter of this year. Another report indicated that across the region as a whole, industrial production was also down. This data is none too surprising considering the recent trend of economic data from Europe has been sub-par, to say the least.
Now, the attention of the world will turn to the European Central Bank and what they plan on doing in order to combat stagnating economies across the region. Not only that, but the ECB will also have to concern itself with rising deflationary pressures that have been a source of worry for investors for almost a year now; in some cases more than a year.
Downbeat Economic Data From US Fuels Risk-Aversion
Wednesday got off to a slow start and saw metals moving more or less sideways, but after a few hours passed, metals spiked upward in response to some weaker than expected economic data from the United States. As you could have probably guessed, the weak US economic data also took a toll on US equities as well as the US Dollar.
A US retail sales report for September concluded that retail sales across the United States had fallen by about .3% month-on-month. This data was far worse than expected and was discouraging to many investors who were under the impression that the US economy had been doing nothing other than improving. Making matters worse for the greenback and equities was a report that indicated a .1% decline in the producer price index in September.
With any sub-par economic data comes the inevitable growth of the belief that the US Federal Reserve will hold off on raising interest rates for the foreseeable future. Though there is no way to tell for sure when the Fed plans on hiking interest rates, most experts hold that a rate hike will not come before next September; a projection that is in stark contrast to previous expectations of a June or July rate hike. Don’t let the data fool you, however, the US economy is still performing extremely well for the 2014 year and is on pace to be one of, if not, the world’s top economic performers.