June 18th Early Week Silver Market Update

Gold and silver started ┬áthe day down a bit ahead of the Federal Reserve of the United States’ Open Market Committee meeting which is set to kick off this morning. After a relatively stagnant day yesterday, it seems as though the marketplace is going to remain calm up until any real news is reported from the FOMC meeting. After making some modest gains yesterday, the US Dollar Index is back down again, flirting with a 4 month low once again. Two key US economic reports that are set to be released today include the latest retail sales report as well as the consumer price index report.

FOMC Meeting and Possible Policy Changes

Every time the Federal Reserve Open Market Committee has a meeting the world marketplace perks up and pays attention to it. This time is the same as every other meeting, but at the same time it is also a bit different. It is the same due to the fact that in the lead-up to this meeting there has been heavy speculation about what is going to be discussed and what, if any, changes are going to be made to monetary policy here in the United States. The difference between this particular meeting and mostly every other one is that much of the speculation that is circling around has the possibility of actually happening. While there is heavy investor speculation before every FOMC meeting, usually it carries a lot less weight than this time around.

The FOMC will meet this morning and their meeting will last until Wednesday afternoon, at which point Fed chairman Ben Bernanke will hold a press conference.

The fields are more or less split, with a strong contingent of people thinking that monetary policy will remain unchanged while others think that it will be slowly wound down over time. The Wall Street Journal reported yesterday saying that they believe the best option is to taper off QE over the course of an extended time frame.

Other World News

The euro is continuing on a good run of form today as a consumer confidence report out of Germany came in much better than expected. This news prompted some people to believe that the German economy and its activity will become better as the year wears on.

Japanese stocks edged a little lower on Tuesday, but not by the drastic margins we have been seeing as of late. The world is continuing to look at the Japanese Nikkei Index as a big factor in what other stock markets around the world are going to do. The hope is that the Index will be able to recover from massive losses it has posted over the last few weeks, but such has yet to be seen.

What Else to Watch For

As we move ahead into the week, the main thing people will be keeping their eyes on is the ongoing FOMC meeting. Until Ben Bernanke officially holds his press conference you can expect a relatively quiet trading day in most parts of the world. We’re all holding out for some big news from this meeting, so we will have to wait patiently and see if anything develops.