Gold Spot Price Open: $1,342
Gold Spot Price Close: $1,340
Change in Gold Spot Price: -$2
Silver Spot Price Open: $20.07
Silver Spot Price Close: $19.67
Change in Silver Spot Price: -$0.40
Precious metals ended up spinning their wheels on Friday, but all in all this proved to be a positive 5-day trading session. When all was said and done, gold lost about two dollars while silver moved downward to the tune of about 40 cents. Platinum and palladium finished the day mixed, with platinum losing a few dollars while palladium added close to ten.
Metals Offer Little Reaction to Manufacturing Data
This has been a week of central bank meetings and economic data, and Friday did not see that change much at all. September’s Markit Flash Manufacturing PMI was reported as having fallen from 52 to closer to 51. While any reading above 50 indicates that the sector in question is, in fact, growing, any backwards movement is going to be unnerving to investors. Even despite this poor data, however, metals did not venture forward much at all. This is perhaps mostly due to the profit-taking that is taking place today after Wednesday and Thursday’s decent gains.
Tim Moore, of IHS Markit commented on what today’s data means by saying, “September’s survey data points to a sustained upturn in manufacturing production, although growth remains subdued overall and only slightly faster than seen through the first half of 2016.” Moore continued by saying that despite the growth slowdown, manufacturers have reported an uptick in inflation relating to input prices and stronger hiring, so the news is not all bad. It is also important to remember that the manufacturing sector of the US economy is not the largest, so while this data is, on its face, poor, the fact is that it will be weighted less heavily than data emerging from the services sector.
Euro Zone Receives Preliminary PMI Data
Today was a big day for IHS Markit as PMI reports for European countries were also published. All in all, the data suggests that perhaps the EU is slowing down rather than speeding up its economic recovery. France realized a slowdown on the part of its manufacturing sector, while Germany’s services sector took a hit. As far as the holistic EU PMI data is concerned, the services sector data reached a 21-month low. This was enough to sum it up, but as these things typically go, the news was not entirely bad. While the services sector was down, the EU’s manufacturing PMI came back at a 3-month high.
IHS Markit’s Rob Dobson commented on the situation in Europe and how things seem like they are getting better, but really aren’t. He said, “The eurozone economy ended the third quarter on a disappointing note. While the underlying picture remains one of sluggish growth of close to 0.3% over the quarter as a whole, it also remains clear that the economic upturn is still fragile and failing to achieve any real traction. Job creation is wavering as a result, with employment rising at the slowest pace since April.”
At the end of the day, this is nothing more than the same old story from Europe. In recent years it seems as though anytime some positivity emerges with regard to economic data, a subsequent report is there to destroy any hopes for sustained recovery.
Wrap-Up
All things considered, we would have to say that this week was a positive one for metals. While the real test will be to see if gains can be sustained come markets’ open on Monday, investors were happy to see gains earned between Wednesday and Thursday mostly stand up to pressure on Friday. If the economic data stream from the US and Europe remains as inconsistent as it has been, gold and silver may very well continue to move higher.
