July 31st Midweek Gold Market Update

Gold and silver both began Wednesday sporting losses, despite making solid gains in the overnight hours. The reason gains turned into losses for precious metals can be directly attributed to the US economic news that was released on Wednesday. It seems as all of the investing world is keeping its eyes on the US in the wake of today’s economic news and in the lead-up to Friday’s jobs and FOMC reports.

As we bring the month of July to a close it must be noted that gold has made gains of nearly $100. $100 may not seem like much but it is better than the losses gold has been posting over the past few months. The same types of gains were not realized by silver in July though silver has still netted a minor gain for July barring a heavy loss by the end of today.

Wednesday’s Economic News

Before we get into the economic news that was released on Wednesday, it must be noted that the FOMC’s statement for this Friday’s meeting is going to be released later on Wednesday and has a possibility of moving the spot values of precious metals in one direction or another.

The first bit of economic data which was released on Wednesday was the second-quarter GDP report. The general consensus indicated that GDP would rise by about .9%, though actual figures came back as improving by 1.7%.

The ADP jobs report was also due out Wednesday and also came back better than expected. It was agreed that ADP jobs figures would come back up around 180,000 though actual figures improved by 200,000. Both of these reports can be directly linked to the reason(s) why gold and silver fumbled their overnight gains in the early morning hours.

Investors Await Friday’s Reports

Despite Wednesday’s early morning economic reports being adversarial to gold and silver, the negative impact they had was softened due to the fact that most investors are holding their positions until Friday.

Friday is bringing with it the week’s top two news stories in the form of a Federal Open Market Committee meeting as well as the latest US jobs report. As far as the FOMC meeting is concerned investors are expecting to more or less hear what Bernanke had to say two weeks ago reiterated. If this is the case, spot values of precious metals will likely not react too drastically as we will be hearing a recycled version of the report Bernanke gave us and US Congress a few weeks ago.

The jobs report, if anything, is shaping up to be bad news for precious metals. Market experts are predicting that non-farm payrolls will have risen by 175,000 and if this is the case it is likely that the unemployment rate will fall from 7.6% to 7.5%. If this news is true it stands a better chance of boosting the US Dollar and stock markets than it does precious metals.

Only time will tell if what is expected out of these reports will come to be, and because of that investors will patiently await the last day of the week.



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