Precious metals continued to probe higher yesterday buoyed by two more weak economic reports. U.S. Consumer Confidence, which is a key indicator of the economy’s health, unexpectedly fell in April by over six percent and the closely watched Federal Reserve Bank of Richmond’s manufacturing survey also missed the mark by coming in lower than expected. The bottom line for precious metals traders and investors was that the USD weakened and our market moved higher. Today begins with another weak economic report but perhaps not a shock to the markets given the recent run of weak data. First quarter U.S. GDP rose just .20 percent verse the economic consensus which looked for a 1.00 percent gain as the USD is again probing lower which should further support our market.
Later today we get a statement from the FOMC as the two-day meeting concludes. I would expect some concession from voting members in today’s statement that economic data does not support a rate hike in June. The key will be any hint over the action that will be taken in September. If the committee acknowledges our economy is now facing a head wind it could set the stage for further weakness in the USD as the likelihood of a rate hike later in the year diminishes.