Gold and silver have begun this week remaining more or less stagnant in the first three days. While there are plenty of underlying bullish factors for gold and silver, the market has also experienced enough bearish data to keep metals in check.
The Federal Open Market Committee’s meeting absorbed most of the attention in the first half of this week, while some US economic data also did its part in catching investor attention.
What the FOMC Meeting Means for Precious Metals
Having gotten underway yesterday morning and concluding this Wednesday afternoon, the FOMC meeting was the recipient of almost undivided market attention. Going into this meeting, the collective belief was that we would see no major alterations to monetary policy. When the meeting wrapped up it became clear that QE would not be touched, a positive sign for precious metals, though the Fed’s post-meeting statement ended up taking the wind out of gold and silver’s sails.
The Fed’s statement indicated that while the US economy is not as weak as it was earlier this year, its strength is not such that taking away QE, or even tapering it, would be a viable option at this juncture. The fact that the Fed made seemingly positive remarks about the US economy was enough to make the FOMC meeting not entirely bullish for metals.
Another piece of information which hit the presses on Wednesday was that of October’s employment report. Market expectations were that non-farm payrolls would have risen by about 150,000 during October, but actual figures came in closer to 130,000. This 20,000 payroll discrepancy hurt the US Dollar, which has done nothing other than decline or stagnate for the past few weeks.
The rising short-term interest rates in China are another talking point for investors, though that scenario really won’t affect precious metals markets unless the Chinese government decides to tighten their monetary policy. If that ends up being the case, this story could end up being a bear for precious metals.
European economic data has been positive this week but it has mostly been overshadowed by the FOMC meeting. So far this week gold and silver have not moved entirely too far from where they kicked the week off, but investors are hoping that the unchanged monetary policy and more less than stellar economic data will help push precious metals to make gains in the latter stages of the week.