October 23rd Midweek Gold Market Update

Gold and silver have calmed down a bit on Wednesday after opening the week in impressive fashion. Now that the US government shutdown is behind us, investors are finally beginning to shift their attention to other matters, such as the shutdown’s possible long-term impact on US economic growth.

Not only that, but a growing situation in China is beginning to catch the world’s attention. As the week approaches its later stages, investors will be paying close attention to whether gold and silver can maintain their recent upward trend or if they will slip back into a decline.

Chinese Interest Rate Worries

Short-term interest rates in China are reportedly on the rise as of late and is cause for concern for investors in Europe and Asia. It is thought that if interest rates continue to rise, Chinese monetary officials are going to need to consider tightening their current policies. Of course, if monetary policies are tightened, it will likely increase overall demand from China for precious metals. Seeing as China is the second largest economy in the world, any decrease in their appetite for gold and silver will be something for investors to pay attention to.

Interest rates are one point of interest from China as of late, though a rise in the average price of houses is yet another reason to watch the Chinese economy.

Delayed Economic Reports Making An Impact

Because of the US government shutdown, a slew of economic reports were put on hold. Now, with the shutdown in the rear-view mirror, many of these delayed reports are surfacing. The first, and arguably most important of these reports was the delayed jobs report from this past September. The market was prepared to see a rise in the number of non-farm payrolls of almost 200,000, but such wasn’t the case. The actual figures showed that September non-farm payrolls rose by only about 148,000. Despite the fact that the figures came in weaker than expected, the overall unemployment rate managed to fall by one tenth of a percentage point to 7.2%.

In spite of the fact that a falling unemployment rate is often indicative of an improving economy, stocks and the USD declined in value almost immediately after the weaker jobs report was released. There are more economic reports due out in the coming days and weeks, though it is believed that quite a few of the delayed reports will be foregone completely in lieu of more updated reports from October.

Nonetheless, the next few months are beginning to look more and more like they will be beneficial to the growth of gold and silver spot values. The short-term is always a big question mark, but with recent events unfolding as they have and are, investors are growing in confidence in regards to precious metals.

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