Friday, August 15, 2014

Gold and Stocks Gain, Dollar Wavers on Weak Economic Data

By Terrence Campbell, Marty Menz, and Everett Millman 

Markets experienced a contradiction of sorts this week, with gold gaining due to anxiety over geopolitical strife while stocks rose as investors saw evidence of de­escalation in Ukraine. 

Gold continued last week’s rally, moving up to around $1,315 per ounce early in the week as it was announced that Russia was sending a convoy carrying humanitarian supplies to Ukraine’s battered East, a move that put Ukraine’s government and Western powers on edge. 

On Thursday, however, Russian president Vladimir Putin announced that Russia was prepared to defend itself, but would avoid risking conflict with the wider world, comments which sent stocks higher on Wall Street as they hinted at an apparent easing of tensions. Silver and platinum remained relatively stagnant throughout the week until Friday, each trading within tight ranges with silver hovering just under $20 per ounce and platinum staying close to $1,470 per ounce. Friday morning saw precious metals across the board, including gold, fall. Gold sank back below $1,300 an ounce and silver dropped well below $20 to around $19.70 an ounce. In other precious metals news, the newest electronic iteration of the daily silver fix began on Friday; its real impact on silver prices, if any, will be assessed in the coming weeks.

The stock market’s upswing on Thursday and Friday morning continued its rising trend for the week. U.S. markets saw a partial reversal of the previous two weeks’ losses with the Dow adding nearly 200 points, or 1.1 percent, since Monday’s open of 16,557.27. The S&P and Nasdaq also experienced significant gains, rising by around 1.3 percent and 2.0 percent from respective Monday openings of 1,933.43 and 4,387.38. The Nasdaq’s strong performance was helped along by an upward push from tech and biotech stocks on Wednesday.

The increase in stocks occurred in spite of poor retail and labor numbers. A report on retail sales, which came out Wednesday, indicated that sales for July were stagnant after a 0.3 percent increase in June. Weekly unemployment numbers, released on Thursday, showed an increase of 21,000 claims, though some analysts point to this as a result of more people entering the workforce. The dollar fell following both reports, though losses were largely recovered by each day’s end.

World markets generally traded up for the week, with Britain’s FTSE 100, Hong Kong’s Hang Seng, and Japan’s Nikkei posting increases of around 2.5, 1.7, and 2.0 percent, respectively. Europe continued to struggle as many Eurozone economies grappled with low industrial demand, slow service sector growth, and sanction on food exports imposed by Russia.

Terrence, Marty, and Everett make up the Content Team at Gainesville Coins, a Leading Gold and Silver distributor. Combining diverse backgrounds and interests in economics, history, anthropology, and geography, the Gainesville Coins Content Team seeks to keep readers informed with current market happenings.