February 2nd Weekly Silver Market Preview

Precious metals are opening up the week having lost value thanks to some weaker economic data from the United States. With that said, however, losses are mostly marginal in nature and are not doing too much to shake the confidence of investors. On the whole, this week is expected to be quiet and mostly devoid of major economic data.

As a result of this, the market will focus on currency and equity markets for a majority of the 5-day trading session. For precious metals, it will be interesting to see if this week will see gains pile up or if the quieter market atmosphere will make for continued losses as a result of increased interest in stocks and the US Dollar.

Weaker Economic Data Weighs on Stocks

Stock indexes in the United States opened up the day having posted some decent gains, but by the time the afternoon rolled around some economic data ended up bringing equities down from daily highs. Today’s reports indicate that perhaps the United States economy may be slowing down.

Despite lower gasoline prices, it was reported that consumer spending in the US fell in December. Not only that, but the most recent ISM Manufacturing Index suggested that manufacturing in the United States was also slowing down. Keeping stocks afloat was a boost in the price of crude oil today. Now that crude oil has seen an uptick in recent days, it will be interesting to see what kind of impact it has on gold and silver.

Looking ahead to the rest of the week, all eyes will be on the price action of crude oil as it continues to make gains. Now, the real questions becomes whether crude oil is able to continue making gains or if profit-taking will see spot values decrease once more. For precious metals, the prospect of stronger crude oil prices is one that does a good job of limiting buying interest. So long as there is plenty of volatility across the global marketplace, however, I am of the belief that spot values will fare well.

Of course, the market will also be focusing on Europe as that part of the world is of particular importance to investors. For now, there really isn’t much going on across the EU worth speaking of, but we are all well aware that that can change in the blink of an eye.

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