August 20th Early Week Silver Market Update

Gold and silver made small gains on Tuesday as a more subdued trading atmosphere persists through the month of August. We have been keeping our eyes locked on the ongoing violence in Egypt as well as the depreciating value of certain Asian currencies. A currency crisis, or what many are labeling as such, seems to be on the horizon, though this news is more positive for gold and silver than anything.

The Federal Open Market Committee of the US Federal Reserve is expected to release the minutes from its upcoming meeting tomorrow which will naturally catch the attention of any type of trader. Metals have not done much moving thus far this week, though such is to be expected during these late summer months.

Asian Currencies Catching Negative Attention

Yesterday, a news story broke which attributed the increase in the spot value of gold and silver which we witnessed last week directly to the decline in value posted by the Indian Rupee. Though the Indian Rupee had lost a lot of value before the start of this week, its extended decline into Monday began to worry a boatload of investors. Now, it is becoming all too obvious that the Rupee is not the only currency rapidly losing value because the Indonesian Rupiah has recently not fared much better than its Indian counterpart.

Interest rates which are on the rise have been putting pressure on mid-level currencies and so far that pressure has pushed the value of these currencies downward. Higher interest rates have caused investors to pump less cash into Indian and Indonesian economies which is now causing these economies’ currencies to lose value rapidly. This problematic Asian money situation is terrible for those residing in effected countries, though it has done well to further promote gold and silver as being safe-haven assets.

For this reason, physical demand for gold and silver is and has been on the up and up.

FOMC Minutes on the Horizon

The US Federal Reserve seems to be in the news at least once a week, and today and tomorrow will make it twice. The Federal Open Market Committee (more or less the body which dictates the future of monetary policy) is set to release the minutes from their upcoming meeting on Wednesday. It is in these minutes that investors hope to find some clues about what monetary policy in the United States will look like going forward into 2014.

So many different rumors have been circulating that it would take a few hours to simply explain what every investor is expecting from this upcoming meeting. Regardless of whether any big news will be talked about because of the release of the minutes or not, there is little doubt that the spot values of gold and silver will do at least some moving tomorrow.

Online and brick and mortar precious metals dealers have been preparing themselves for what looks like some of the best sales they will be able to post all year. Recently demand for gold and silver has shot up, and it does not look like there is an imminent end to that demand in sight.