Gold and silver are experiencing some decent gains in the early part of Monday due to some weaker than expected Chinese data as well as a weaker US Dollar Index. As this is a holiday week for the United States, expect the trading atmosphere to be heavily subdued for a large part of the week. While Chinese economic data set the tone for Monday, the whole week will feature different economic stories coming out of places like Europe and the United States. Demand for gold and silver seems to have finally picked up a bit in response to spot values hitting their lowest points in years. Safe-haven demand for gold and silver could be vocabulary you might be hearing a lot in the coming days and weeks thanks to new riots and protests around the world.
Asian Economic News
There was a healthy serving of economic data out of Asia on Monday, most of which was more disappointing than what was expected. We start things off in China where the latest Purchasing Managers’ Index came in weaker than anticipated. The PMI reading of 50.1 in June was 7 tenths of a percentage point than May’s 50.8 reading. Though the PMI reading dipped from May to June, any reading above 50 alludes to the fact that the manufacturing industry in the country is growing.
China’s HSBC Manufacturing PMI was also weaker than expected in June as it officially read 48.2. This number was a whole point lower than May’s reading of 49.2. China isn’t the only country who received a lower HSBC manufacturing PMI reading as the same happened in South Korea, Taiwan, and Indonesia.
Japanese stocks experienced some modest growth on Monday thanks to improved numbers in the Tankan Survey. This survey is essentially a measure of business activity in Japan, and 2013′s second quarter Tankan survey was far better than the first quarter’s. To round out our reporting of Asia, early reports have indicated that China is experiencing increased demand for gold and silver due to very low spot values.
Gold and Silver to Welcome Safe-Haven Demand
Despite this week being a holiday week in the United States, there is still a decent amount of economic news we will be awaiting patiently. While the European Central Bank and the Bank of England kick off their monthly meetings on Tuesday, no major shifts in monetary policy are expected to be heard. A US jobs report is set to be released on Friday, and it will be interesting to see how the market reacts to such a pivotal report happening the day after a major holiday.
Tensions in Brazil are at an all-time high while tensions in Egypt are beginning to catch some attention as well. Both countries are or have been staging massive protests due to general dissatisfaction with the government. If these protests turn violent, which many of them do, safe-haven demand for gold and silver may increase. Over the course of the past month or so, precious metals have more or less abandoned their safe-haven status, something that rarely happens.
