October 15th Early Week Silver Market Update

For the first half of October, the main news story the precious metals industry has had to focus on is that of the ongoing partial US government shutdown. The shutdown, which went into effect on the first of the month, has resulted in over 800,000 government employees being without work for over 2 weeks now while the agencies and departments they work for have been and remain closed.

Now, investors are beginning to focus on another development also involving the US government. The debt ceiling, which is set to be reached in the next few days, is another problem Congress has to battle with.

What Does All This Mean for Precious Metals?

In the lead-up to the government shutdown, the dominant question investors had was how a shutdown would affect the precious metals market. Some felt that the disruption of a government shutdown would prompt an increase in safe-haven demand for gold while other believed that precious metals, along with most other markets, would decline in the wake of a stagnant US government.

We quickly found out that the latter was true as precious metals declined almost immediately after the shutdown became official. For the last two weeks now we have seen a fairly steady decline in the spot values of both gold and silver. While the prospect of a government shutdown might lead one to believe that investors would abandon stock and bond holdings in an effort to more safely guard their assets through precious metals, the fact that we have known about the possibility of a government shutdown for over a year means that the shock typically associated with this type of event was not seen in the least. On top of that, many investors are still convinced that Congress will formulate some sort of solution before the ongoing shutdown overlaps with the pending US debt ceiling being reached.

Still, with each passing hour, the possibility of the shutdown overlapping with the debt ceiling being reached is growing. If such an occurrence comes to fruition we may finally see the increase in safe-haven demand for precious metals that many expected more than half of a month ago.

Towards the end of last week it was reported that President Obama was in talks with Congressional leaders about the possibility of temporarily raising the debt ceiling in an effort to allow Congress to focus on the shutdown before tackling any other issues. Over the weekend those talks seemed to have broken down and on Tuesday we are no closer to raising the debt ceiling or seeing a viable budget than we were last week. Yesterday there were a few reports making their rounds saying that Democrats and Republicans in Congress were closer to reaching a budget resolution, though such news has not been officially confirmed.


September 3rd Early Week Silver Market Update

Gold and silver have started Tuesday on a positive note as Americans return to their offices after celebrating the Labor Day holiday yesterday. Labor Day, a holiday which marks the unofficial end to the summer season, was to thank for the quieter trading atmosphere which we witnessed on Monday.

Our attention remains locked on the ongoing situation in Syria which has calmed down but is still far from over. Now, with summer winding down, many are anticipating an increase in the amount of trading that they see go on on a daily basis. Family vacations are over which means people will be back to work in full force throughout September and moving forward into the final part of 2013.

Tensions Regarding Syria

At this point last week the world was gearing up for what they considered to be an imminent military strike by the US on Syria. In the early running of last week all major news outlets were alluding to the possibility of the US unleashing an attack as soon as the end of the week. As the days wore on tensions around the globe were high, something that helped boost the spot values of gold and silver significantly.

When Thursday came, however, the mood began to change as an attack by Western nations on Syria looked to be less and less likely. Not only did the UK Parliament shoot down a bill which would see the UK engage in war in Syria, president Obama of the US announced that he would seek the approval of Congress before he initiated any type of attack against Assad’s Syrian regime.

At this point in time, even though the American president seems to be itching to go to war with Syria, a majority of US citizens would like to see anything but war take place. Many Americans feel as though more war in the Middle East would only mean more lives lost, money wasted, and time wasted than what has already been done in that region over the course of the past decade. Because Obama is choosing to seek Congressional approval and the UK has backed out of a possible strike, the once surging spot values of gold and silver have calmed down. We will continue to monitor this situation as it seems new developments are likely going to take place sometime in the near future.

Other Important Pieces of News

Now that the Labor Day holiday has passed, it becomes time for the American investor to focus on the upcoming jobs report and a number of different pending stories.

On Friday, we will be greeted with the latest US jobs report, and what that report has to say will be taken very seriously by investors. If it is a good report, expect those who believe the Fed will wind down or do away with QE to be out in full force, and expect the opposite if it is a sub-par report.

Also happening this week are both the Bank of England’s and European Central Bank’s monthly policy meetings. These meetings help directly dictate what monetary policy in these two parts of the world will look like going forward. This is shaping up to be a busy week of trading and investing, and things are likely going to be shuffled around in the blink of an eye so it is crucial to stay on top of all the latest news stories.


August 27th Early Week Silver Market Update

Gold and silver are both solidly up on the second day of the unofficial last week of Summer. The marketplace is quiet for the most part, though the potential for an increase in violence in the Middle East is growing rapidly. This looming possibility means that investors are looking to take fewer risks and are more apt to allocating their investment funds places where they think their money will be safe.

It will be a slow start to the week for the UK as well, who is just starting its week today due to the observance of a public holiday which took place yesterday.

Increased Syrian Tensions

There is a feeling of “risk-off” in the marketplace today as the United States looks more and more like they are going to take some sort of military action in Syria. After reports that the current Syrian government used chemical weapons against its own citizens surfaced, the world began to pay close attention to this particular nation.

It is unclear the exact type of action the United States is going to take, but so long as the military is involved there is little doubt that it will greatly increase the tensions in a part of the world where tensions are constantly high as it is.

Gold and silver shot up in value early Tuesday as precious metals are taking on the quality of safe-haven assets. World stock indexes are suffering today which means no one is all too surprised when they see gold and silver making the gains that both metals have already today. It is likely that, barring any big news, gold and silver will make this day one of the largest single-day gains both metals have made in a while, but only time will tell if this is the case.

The Indian Rupee also took another dive this morning as it hit yet another record low when compared to the US Dollar.

Light European News

Even though United States’ potential involvement in Syria as well as the continued depreciation of the Indian Rupee are making most of the headlines on Tuesday, there is still some economic news to report out of Europe, Germany to be specific.

The German Business Confidence Index rose for the fourth straight month, bringing confidence levels to their highest point in over a year.

This news help boost the belief that the Euro Zone economy is beginning to fully recover from economic recession. Germany, the EU’s largest economy, has been pulling much of the weight as it is by far the best economy in the region. More lately, however, we have seen other countries join in the effort to make the EU as prominent of an economic region as it was only a few years ago.


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.


August 13th Early Week Silver Market Update

Gold and silver, after posting some impressive gains on Monday, were brought back down to earth on Tuesday thanks, in large part, to a corrective pullback. Almost always, without fail, whenever precious metals post fairly large gains one day, the next day features a weaker price, even if only slightly weaker.

Investors are awaiting a US retail sales report which is expected to be positive for the overall US economy. Also in the news is a bit of European economic data, all of which is surprisingly positive for the Euro Zone. After gold hit a near 3-week high on Monday, investors are hoping they can ride this wave to more gains by the time markets close on Friday.

Gearing Up For Positive Economic Data

Retail sales in July were reported as being up by about .2%. This marks the fourth consecutive month of positive results out of the United States’ retail sector. This report will likely give those who believe QE should be wound down soon more confidence going forward. A growing and flourishing US economy is great for the American people, though not so great if you have a vested interest in precious metals such as gold and silver.

The current monetary policy of Quantitative Easing works by overloading the economy with paper money which thus brings down the greenback’s value and as we are all aware, a decline in the value of the US Dollar almost always translates into a higher spot value of gold and silver. If QE is tapered out or even done away with entirely it could be the impetus for a decline in the value of both gold and silver. The Federal Reserve, the government body in charge of monetary policies in the US, has recently been heard making contradictory comments regarding the future of QE and thus it is wholly unclear what will happen to the monetary policy going forward, if anything is going to happen at all.

European Economies Continue Upswing

Last week marked the first time in a while we were able to report positive news in regards to the general European economy. The good news continues as the most recent economic report indicated that industrial output for the European Union rose by .7% over the time period of May to June. Overall industrial output for the second quarter of 2013 was up by over 1% when compared to the European Union’s first quarter.

Additionally, the heavily watched German ZEW economic expectations index posted a higher reading in August than was recorded in July. August’s reading came back at 42.0 while July’s reading was 36.3. While these numbers may not mean anything to you, all you need to know is that a reading of 42 is much more suggestive of a growing economy than any reading in the 30s. Apart from Greece, the majority of Europe is seeing the prospects of their economies begin to look up for the latter half of 2013. It will be interesting to see if the positive economic readings continue or if Europe will revert back to their old ways, the ones we have grown accustomed to thus far in 2013.

Physical demand for gold and silver has been up since the back end of last week and is continuing to grow.

August 6th Early Week Silver Market Update

Gold and silver began the second day of the first full week of August losing value, mostly thanks to better than expected economic reports from around the world. Now that we are in the midst of summer vacation time, the amount of trading that is going on on is small in comparison to other times of the year.

The slate of economic news stories to look out for this week is light, and because there are no major news stories the spot price of gold stands the chance of being moved by even the smallest bits of economic data.

European Economic Data

The first day of the week brought with it some exciting news out of the European Union in that the Purchasing Manager’s Index for July rose above the 50 threshold. Any PMI reading that clocks in above 50 is a good indication that the economy in question is experiencing growth rather than contraction.

More good news was in store for the European economy on Tuesday in the form of an increase in manufactured goods orders from May to June. Over the course of a month, manufactured goods orders increased by nearly 4%. This news did little to European stocks, though it is likely a major part of the reason why gold and silver took hits on Tuesday.

Miscellaneous News

Even though the spot value of gold has been on the decline during the first two days of this week, the US Dollar Index has not seen the gains one might expect. The USD is actually hanging around a 5-month low and is even inching downwards even further.

Yesterday also saw some better than expected Chinese news be released as their PMI was also on the rise.  Seeing as more and more economies are coming out of the doldrums, it is becoming increasingly difficult for gold to gain any sort of strong foothold, let alone surge forward in value. With spot values falling yet again, it is likely that we will see some sort of increase in demand for both gold and silver.


July 23rd Early Week Silver Market Update

Gold and silver started Tuesday mildly down after both metals had made impressive gains only a day ago. After the marketplace digested what Federal Reserve Chairman Ben Bernanke had to say last week, it turned out that his remarks were beneficial to both gold and silvers’ spot values.

This week is set to be one with few major economic news stories and thus, apart from Monday, it is not anticipated that gold or silver will be making any major moves. While this seems like a fair assessment, no one can ever be too sure about where the spot values of precious metals are going to go.

Bernanke Addresses US Congress

Last week might as well be a whole year ago as far as investing is concerned, but remarks that were made almost 7 days ago have had some lasting effect on precious metals this week. At this point last week the main piece of news weighing on every investor’s mind was Federal Reserve Chairman, Ben Bernanke, and his upcoming speeches to both the US House of Representatives and the Senate.

Last Wednesday Mr. Bernanke stepped in front of the House and shocked many people with what he had to say about monetary policy in the US. He asserted that Quantitative Easing, the government’s monthly bond-buying initiative, is by no means on a predetermined course to be wound down or done away with. This news came as a surprise to many as a widely circulated popular belief is, or was, that QE was going to be wound down or done away with by the end of the 2013 calendar year. Bernanke not only shot down this belief, but he went as far as to say that if the US economy were to take a turn for the worse anytime soon the Fed would not have any qualms with perhaps boosting the monthly bond buying employed by the US government.

On Thursday Bernanke was set to address the US Senate, and in his address he just about mirrored what he had to say to the House a day earlier. Both days of remarks saw gold and silver spot values move up and down slightly, but in the end they were left more or less unchanged. Such was the case until the end of the week, though the real effect of Bernanke’s remarks was felt yesterday when gold gained over 30 dollars and silver made gains that were just under a dollar.

Coupled with the higher spot values of gold and silver was a lower USD Index, which always helps the precious metals market.

Light Economic News

While Monday was a frenzied day for most precious metals market watchers, Tuesday has started out significantly calmer. There are very few economic reports due out, and the ones that are are expected to have little to know impact on the precious metals market.



July 16th Early Week Silver Market Update

Gold and silver started Tuesday a bit higher than where they ended on Monday mostly thanks to some outside markets giving the metals room to stretch their legs. Crude oil prices were higher while the US Dollar Index started the day lower than where it had ended Monday’s trading session.

There are a few economic reports due out on Tuesday, though most traders will be holding steady until they hear Federal Reserve Chairman Ben Bernanke’s address to the US House of Representatives some time on Wednesday.

Bernanke’s Address

Tomorrow will likely see precious metals manipulated in one way or another seeing as that is the case just about every time Bernanke makes any sort of speech or address. He will be addressing the House of Representatives about the state of the economy as well as the future of monetary policy in the US. Precious metals investors will be focusing in on the latter aspect of the address as monetary policy has been a topic of heavy debate in the United States recently.

Currently the popular thought is that monetary policy in the US will be changed significantly before the end of the year. Many are pointing towards September as the time when the Fed will begin to “wind down” its current Quantitative Easing policy. The reason this is such a prevalent thought is due to the fact that the US economy has been thriving as of late, especially when compared to many other major economies of the world. While countries like China and Japan are in the midst of a bit of economic crisis, the US is on its way to full recovery from the recession we witnessed only a few years ago.

European Union Contraction

It is no secret that many of the world’s major economies are in bad shape, and perhaps the worst of them all is the overall state of the economies that comprise the European Union. A report during the overnight hours indicated that both imports and exports for the region have fallen. This bit of data suggests that the EU will suffer contraction for yet another quarter, at least.

While many European economies are in disarray, Asian markets seem to be on the up and up, at least from a precious metals point of view. Early reports are indicating that physical demand for both gold and silver is on the rise in places like India and the rest of Asia. So far this summer we have seen subdued demand for gold and silver, despite prices being incredibly low.  This news means that both online and brick and mortar precious metals dealers are going to have to handle larger order quantities in the coming days and weeks.


June 25th Early Week Silver Market Update

Though gold and silver’s decline, which began late last week, was still going strong on Monday, the early parts of Tuesday have seen the slide correct itself a little bit. Both metals were up from their opening position a little bit, but these numbers are more or less insignificant compared to the losses we witnessed last week. Financial and economic troubles that haunted the Chinese and general Asian marketplace on Monday have been seemingly settled or at least calmed down by the morning hours on Tuesday.

China Settling Down?

Only a day ago we were talking about the looming of a liquidity crunch in China, and only a day later that is already old news. The nation’s monetary officials, on Tuesday, announced that the liquidity crisis is under control and that the turbulent economic atmosphere that seemed to be on the verge of throwing the marketplace into a frenzy was only a temporary speed bump.

This is good news because investors and market watchers from around the world were beginning to get apprehensive about what the immediate future might hold for them if the world’s second largest economy were to go into a state of shock. This good news prompted Asian stocks to rebound a bit from their dismally low positions on Tuesday.

Other World News

In other news, many central banks from around the world have been announcing a lot less severe future tactics for their monetary policies. Unlike the US Federal Reserve, specifically Ben Bernanke, other countries have made announcements saying that their changes in monetary policy will not be nearly as aggressive as the potential ones facing the United States.

A major European paper quoted an Italian bank which alluded to the idea that the nation as a whole may need yet another bailout package sometime in the near future. This is not too surprising as the Italian economy is fading fast and its credit situation isn’t doing much better.

At the beginning of Tuesday the US Dollar was down a bit but this was more or less expected due to precious metals’ slightly better form. The US Dollar is still very much in the driving seat and it would not, at all, surprise the marketplace if it were to end today making more positive gains.

What Else to Watch For

There are a few economic reports due out in the United States today including a retail sales report, durable goods orders report, home price index, consumer confidence index, and the latest business survey.

With spot values of both gold and silver still very low, bargain hunters will once again be out in full force buying up metals online and at brick and mortar stores.


June 18th Early Week Silver Market Update

Gold and silver started  the 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.