How Black Friday Impacts The Gold and Stocks Markets? – Study of Sentiment Analysis!
Arslan Butt • 2 min read
What's up, traders. You must be enjoying Thanksgiving and Black Friday. I was wondering if you guys know how Black Friday leaves its marks on the Gold and Stock markets. Well, it’s all about the way investors think. Confused? Check out this interesting scenario of investors sentiment.
What's Black Friday?
It's the day after Thanksgiving, reckoned as the first day of the traditional Christmas shopping season, on which retailers offer special reduced prices. Black Friday unofficially is the start of holiday shopping as it's a day when retailers offer high discounts on products to boost up their sales and revenue.
How Black Friday Impacts Stock Markets & Gold?
Since the beginning of 2013, retailers have started Black Friday way before Friday. The reason is to boost sales revenue. Some shops offer their Black Friday sales on the day of Thanksgiving. Whereas, some sales even before on Wednesday and Monday. As a result, the retailers make more sales throughout the week.
Now let's come to the impact on the stock markets.
– Logically, the increase in sales results from increased consumer spending, and the increasing consumer spending causes inflation. That's it, the inflation is an indicator of economic growth.
– The increased sales also increases the profits of corporations. So, to gain more dividends, the investors increase their investments in the stock markets.
– Due to increased business activities, the corporations hire more people in order to accommodate the increased demand for their products. This result leads to drop in unemployment rates.
Stocks – Bullish/ Buying Tendency: We can expect a bullish trend in the global stocks due to the reasons discussed above. However, the bullish waves are likely to be short-lived.
Gold – Bearish/ Selling Tendency: The focus on investors switches to stock markets, therefore, we can expect a drop in the demand for Gold. Other things keeping the Gold is likely to trade in a bearish tone during the week followed by Black Friday.