December 17th Midweek Silver Market Update

The spot values of gold and silver are making small gains as of the writing of this post early Wednesday, something that is surprising when you consider the fact that most investors are simply holding their positions ahead of the conclusion of the FOMC’s latest meeting. Up to this point, this week has seen gold and silver lose much of the value, if not all of the value, that was gained during the early parts of last week. Unfortunately, the safe-haven demand that was driving physical purchases of gold and silver a week ago is no longer present in the marketplace.

In addition to continued focus on the FOMC meeting, investors are also concerning themselves with what is going on in Russia. Over the course of the past year, the Russian ruble has lost more than 50% of its value and is currently sitting at multi-year lows against the USD. During the last few days, the ruble has seemingly been in free-fall and is looking weaker than ever. According to most experts, the ruble’s current weak trend is the direct result of Western economic sanctions and the fact that the price of crude oil has been trading down for the better part of the past two months.

Though it isn’t the biggest concern for investors, everyone is keeping their eyes on the Russian economy and government. As of now, the overriding fear is that a military-minded Putin may lash out at the Western nations who are, for all intents and purposes, causing Russia’s current economic decline. For this reason and many more, you can expect continued attention to be paid to Russia over the course of the next few weeks and months.

FOMC Meeting Consumes Market Attention

Typically, the week of the FOMC’s monthly meeting sees most of the market’s attention go directly towards what the FOMC will say and do during their meeting. More often than not, all of this attention is misplaced simply because the FOMC rarely makes major policy shifts. Despite the fact that there is always speculation concerning a potential shift in policy, it rarely ever actually comes to fruition.

Just like every other time, this week’s meeting is at the center of a boatload of speculation regarding interest rate hikes. Now you see, interest rate hikes have become something that is more or less an expectation after the FOMC announced that such rate hikes were a possibility during the late summer months. At this week’s meeting, it is the overriding belief of the marketplace that the FOMC will make some sort of announcement regarding when and by how much interest rates will be raised. Though there is no credible source able to confirm this, the rumor is spreading like wildfire.

Upon the conclusion of the FOMC meeting this afternoon, the market will convene on the post-meeting press conference that is expected to be held. It is at this press conference that investors think an interest rate decision will be made. For gold and silver, there is no saying what a solid timeline for the raising of interest rates could mean, but most indications are pointing to it being not good news at all. Still, we will just have to stay tuned to what the FOMC has to say to find out.

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