January 21st Midweek Silver Market Update

Gold and silver spot values are moving forward yet again today, fueled mostly by investor uncertainty ahead of this week’s European Central Bank meeting. Now, both gold and silver spot values are sitting above key points of technical resistance and are sitting at near 6-month highs. This week is activity-filled simply because of the sheer quantity of economic data and economic happenings taking place, but apart from the ECB meeting, there aren’t many factors that are able to stop gains being made by gold and silver.

For the better part of the last few weeks, the global marketplace has been almost fully focused on the European Union. Though the ECB meeting is part of the reason behind why investors are so worried about the EU, there have really been almost non-stop news stories coming from the region. This week is seeing much of the same play out as investors once again cannot take their attention away from the EU.

European Union Takes Center Stage This Week

Like was made painfully clear in the opening of this piece, the eyes of the investing world have been wholly fixated on Europe for the better part of the past two or three weeks. Last week saw quite a few news stories originate from the EU, including a surprise move by the Swiss National Bank to unpeg the Franc from the Euro. This move was unexpected by the wider marketplace and sent a shockwave across the spectrum of global investors which, in turn, caused interest in safe-haven gold and silver to spike.

In addition to this, last week also saw the European Court of Justice rule that the ECB is legally allowed to explore experimental monetary policies so long as they are fully explained before being enacted. Furthermore, the ECJ also ruled that the ECB’s proposed quantitative easing plans are within the realm of the law. This ruling more or less solidified the overriding belief that the ECB was going to announce a monetary policy shift at their meeting this week.

While the marketplace is quiet today as investors gear up for tomorrow, there is still a lot of price action to speak of. For one, US stocks are once again conceding value after making impressive strides forward the last few days. With such volatility persisting in global equity markets, it is really no wonder that investors are becoming so much more interested in precious metals. Now, as the weeks move forward, it will be interesting to see if gold and silver can hold or possibly even build upon the gains made recently.

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