Despite making solid gains to close out last week, both gold and silver spot values are moving back downwards as of the early parts of Monday. The reason for precious metals’ return to a downward trend is due to the fact that the US Dollar is hovering at a 4-year high yet again. Even though there was metals-friendly news made public out of Asia on Friday, the overall marketplace is still quite bearish and devoid of many factors able to lift spot values back up to where they were only a few months ago.

This week, at least for those in the United States, will be a shortened one due to the Thanksgiving holiday falling on Thursday and the unofficial “Black Friday” holiday coming the day afterwards. The end of last week, however, brought about some economic data from around the world and, surprisingly, most of it had a solid impact on the US marketplace. As we look forward to this shortened week, it doesn’t seem as though there will be all that much economic data for investors to talk about and mull over.

Chinese Central Bank Makes Shocking Rate Announcement

Last week, much like the previous two or three weeks, was quiet and mostly devoid of any markets-moving economic data. Fortunately for the market, however, that all changed by the last two days of last week. On Thursday, there was a solid batch of US economic data for investors to talk about. Generally, the data from the United States was upbeat and painted a picture of an economy that is still outperforming many of its rivals.

According to a few reports, factory activity, especially that in the mid-Atlantic US, was on the up and up in October and hitting at levels we have not seen in multiple decades. Adding to that report was one on existing home sales and how they were only continuing to improve. As you could have probably guessed, all the upbeat data from the US economy convinced investors that interest rate hikes have to be coming sooner rather than later.

While investors in the United States were left speculating with regard to interest rates, investors in China were dealt some shocking news regarding their interest rates. According to numerous reports, the Chinese Central Bank slashed its primary interest rates for the first time in more than 2 years. This decision came on the back of economic data that really has been sub-par by Chinese standards. As a result of this surprise rate decision, investors flocked to physical gold and silver as ways to defend themselves against currently uncertain economic conditions. In fact, the day’s news was so shocking that investors drove spot values directly upwards to close out the week. Unfortunately, however, some of the gains made on Friday are being conceded as of the writing of this post during the mid-morning hours of Monday. It will be interesting to see, as this week plays out, whether spot values will continue to depreciate or if some unforeseen factor will come in to once again give metals a boost.