Gold and silver are trading even to slightly higher through the morning hours on Wednesday. A lack of any fresh bullish news combined with deescalating tensions in Ukraine are both making it difficult for precious metals to make any significant strides forward.
There were a number of PMI readings due out today, all of which were important to investors the world over. The US is not expected to yield any overly important pieces of economic data this week which is yet another factor working against gold and silver. US equities and the US Dollar have been making strides forward over the last few days and have been putting unrelenting pressure on precious metals.
PMI Readings Catch the Marketplace’s Attention
Despite there not being many pieces of economic data due out of the US this week, there were quite a few PMI readings due out earlier this morning. China’s manufacturing PMI reading came in at 48.0 in April, down from 48.3 in March and well below the all-important reading of 50. Any PMI reading below 50 suggests that that sector of the economy is experiencing contractions. While China’s PMI readings were disappointing, the output of their manufacturing sector is still far better than most other industrial nations around the world.
The EU also received their PMI readings from April, all of which were better than anticipated. The EU’s services PMI for April came in at 52.5 versus a reading of 52.2 in March. The manufacturing sector PMI reading for April also came in .3 better than March at 53.3. Even though there are persisting deflationary worries making rounds across the EU, the overall economy is performing incredibly well over the last few months. Having said that, it is expected that the EU economy will only continue to improve as this year moves forward.
Even though there has not been much US economic data for the market to reflect on this week, there are a number of factors working against precious metals spot values, including a strong USD index and stronger US equities. So long as these two entities continue to gain momentum it will be nearly impossible for precious metals to make any significant gains.