Spot gold and silver are continuing to feel selling pressure on Wednesday even though the 1st quarter’s GDP report came back far weaker than expectations. Despite the large amount of economic data on the slate for today and this week, investors are still continuing to pay close attention to the situation in Ukraine. Pro-Russian rebels all throughout Ukraine’s east have been taking over towns and official offices and more or less seizing parts of the country as their own. Violence is sporadic and most often not deadly, but the crisis in Ukraine is far from being resolved.
The United States was reported as having placed more economic sanctions on Russian businesses and individuals, but sanctions have thus far done nothing in the way of swaying Vladimir Putin’s opinion about how Ukraine should be handled. The crisis will recede to the back burner for the remainder of the week more than likely, but it is far from being out of the news completely.
Busy Week From An Economic Data Standpoint
To say that this week is a busy week from an economic data standpoint is a bit of a misnomer due to the fact that most of the data is due out Wednesday through Friday. Nonetheless, there is still a healthy amount of US and world economic data on the slate this week. Today yielded the 1st quarter GDP report for the United States and showed a US economy that is growing slower than expectations. Compared to expected year on year growth of more than 1%, the US GDP actually only grew by about .1%. Under ordinary circumstances, gold and silver spot values would have been given a noticeable boost as a result of the weak GDP data, but as a result of the FOMC meeting wrapping up later this afternoon, such gains were not realized.
Investors are continuing to hold their positions as they anxiously await Janet Yellen’s post-meeting statement. The marketplace is expecting to hear two things during Yellen’s statements; 1. that Quantitative Easing is further reduced and 2. the Fed’s current outlook on the US economy’s strength. These two vital pieces of information, if received, have a very high chance of moving precious metals spot values in one direction or another. If further tapering is announced, however, there is no denying that it will more than likely put even more downward pressure on precious metals.
Rounding out the week are both a key Chinese manufacturing report as well as April’s Labor Department statistics. The Chinese economy’s strength has been called into question recently which is why the investing world is going to continue to pay such close attention to any and all economic data that surfaces out of China. As is almost always the case, the marketplace will be paying incredibly close attention to the non-farm payrolls data due out on Friday as to gauge whether or not the unemployment rate is going to move. Currently the market is expecting to see job growth number more than 200,000 in April, but we will have to wait until Friday to find out for sure.