Though gold and silver made moderate gains in the overnight hours, they quickly returned those gains upon better than expected economic news Wednesday morning. Market experts are predicting that the effect this economic news will have on precious metals is going to be quite small due to the fact that the collective marketplace is awaiting the two marquis news stories of the week, both of which are set to be released on Friday.
Up until this point in the week both metals have done little moving for the same reason as was mentioned above. Even with the two major news stories of the week set to be released on Friday, both of them stand a strong possibility of not having any major effect on the spot prices of precious metals.
US Economic News
The first batch of economic news due out on Wednesday was the US second-quarter GDP report. Even though most market experts expected second-quarter GDP to rise by just a tenth or two of a percentage point below 1%, actual figures for the second quarter came in at up 1.7%. The second bit of data that came out on Wednesday was the ADP jobs report which increased by 200,000 versus an expected increase of around 180,000.
Though this news made gold and silver revert the gains they made overnight, it did not hurt them as much as it could have if the world marketplace was not gearing up for even more relevant market news on Friday.
Rest of the Week
As we round out the week and the month of July we have two key bits of information to look forward to for two days from now. Though the actual Federal Open Market Committee Meeting is scheduled for this Friday, the meeting’s written statement is being released late Wednesday. This will give investors a fairly clear picture of what they can expect to be stated on Friday, though most people are gearing up for a mostly uneventful meeting.
Also due out on Friday is the latest US Jobs report which is expected to more or less mirror Wednesday’s ADP jobs report. Expected figures indicate that non-farm payrolls will have risen by around 175,000. If all goes as planned as far as the jobs report is concerned the unemployment rate is predicted to fall from 7.6% to 7.5%.
Only time will tell if the economic news is going to come back as predicted, but if it does it stand a strong possibility of putting some downward pressure on overall demand for physical gold and silver.