Precious metals are seeing their spot values slowly but surely diminish after receiving some initial support this morning. On the whole, this week is very quiet and has not and likely will not, offer much in the way of markets-moving economic data. That previous statement was proven false in some ways this morning, when a US retail sales report was made public. Other than that, however, this week is so quiet that the market has no choice but to continuously focus on the ongoing geopolitical situations developing around the world.
Retail Sales Support Precious Metals, But Only Momentarily
Shortly after US markets opened today, a US retail sales report was made public and showed somewhat disappointing figures. After June’s report saw retail sales increase by two tenths of a percentage point on an annualized basis, many were expecting July’s figures to yield much of the same. Unfortunately, however, it was reported that July retail sales remained unchanged from what was recorded in June. This news worked to initially limit the selling pressure being experienced by precious metals, but as of the writing of this post, that support had all but diminished.
Now, spot values are beginning to slide as US equities and the US Dollar continue trekking forward. There is some keener risk-appetite being shown by investors around the world, and that is translating into gains being made by US equities. Recently, the performance of US stocks has been the number 1 factor preventing gold and silver from making any gains worth talking about. Even when geopolitical factors boost safe-haven demand, the general interest in US equities prevents safe-haven demand from making too large of an impact on the spot values of precious metals.
As we move forward into this week, it is likely that the attention of investors will remain scattered, but mostly fixated upon a potential standoff between Ukrainian military forces and a Russian humanitarian convoy. The story, which broke on Monday, says that a more than 200 truck convoy is headed from Moscow to the war torn Ukrainian city of Luhansk. Though Russian officials have yet to confirm where the convoy is officially headed, most believe that Luhansk, whose resident have been without running water and electricity for more than ten days now, is its end-destination. It will be interesting to see how this situation plays out over the next couple days and whether or not it translates into increased violence throughout Eastern Ukraine. Though there are no confirmed reports with regard to when the convoy will reach the Ukrainian border, it is more than likely going to happen in the next day or two.