How the Latest Economic Numbers Affect Gold



Economic data analysis

The data reflecting economic activity in the US plays a significant role in influencing the US dollar, which in turn affects precious metals. In general, the sentiment in the market impacts haven bids for metals like gold and silver. These safety assets often surge during times of market unrest.

The advance GDP data came out on January 26, 2018, measuring the annualized change in the inflation-adjusted value of all goods and services produced by the economy. The figure stood at 2.6%, which was much lower than the analysts’ forecast figure of 3.0%.

The past two quarters had seen a positive outcome, which was a higher outcome than analysts’ expectations.

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Impact on funds and miners

Precious metals have witnessed a rise in their prices during the last month. Gold increased 5.3% and silver rose 5.2% in the previous one-month period. This trend boosted gold- and silver-based funds like the Physical Swiss Gold Shares ETF (SGOL) and the Physical Silver Shares ETF (SIVR).

The durable goods orders placed with US factories rose in December 2017, reaching 2.9%, which was much higher than the forecast figure of 0.9%. This was the highest point for this metric in almost six months. A number higher than expectations is a positive indicator for the economy.

Among the top mining companies, Newmont Mining (NEM), Goldcorp (GG), Agnico Eagle Mines (AEM), and Wheaton Precious Metals (SLW) increased 0.69%, 0.07%, 0.9%, and 0.77%, respectively, on January 28.

The negative sentiment from the GDP data may have caused a rise in gold and silver, which also supported the mining companies’ share prices.


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