Gold and silver are trading slightly lower for a second consecutive day, though the amount of value both metals have lost is more or less negligible. This week is shaping up just like last week due to the lack of fundamental inputs making their way to the marketplace. Profit-taking and a slight technical correction are to blame for precious metals’ early week losses, though these two factors should be expected after the run gold and silver went on last week.
Despite this week lacking any noteworthy economic data from the US or elsewhere, today will be particularly important to investors due to the release of the latest FOMC minutes. As we move further into the month of February, it is becoming clear that commodities, especially gold and silver, have the near-term technical momentum.
Gold, Silver Continuing To Push Forward
Despite the last few days being somewhat negative for precious metals, the value they have lost due to profit-taking has been marginal to say the least. The reason for this is due to the growing risk-averse attitude exhibited by worldwide investors. So long as the investing world is actively seeking to mitigate risk within their investments, safe-haven demand for gold and silver will almost always grow, and grow rapidly. If you have a hard time believing this, all you have to do is take into consideration the fact that gold has gained more than $100/ounce since the turn of 2014. Not only has gold performed well, but silver too has made impressive strides forward thus far this year.
Today’s release of the latest FOMC minutes will be of vital importance to investors who are curious as to whether the tapering will continue or if the FOMC will temporarily pull the reigns on reducing their bond-buying. In all reality, the minutes will likely not provide much of any insight into what the FOMC plans on doing at their next meeting. Instead, I am expecting that today’s minutes will only see the Fed reiterate their positive outlook on the US economy.
In other news from around the world, violence between protesters and riot police is intensifying in the Ukrainian capital of Kiev. Since this past November, when Ukraine’s president, Viktor Yanukovych, made the decision to eliminate ties with the EU, protesters have been taking to the streets in opposition of this decision. While it may seem strange that Ukraine’s president voluntarily chose to essentially leave the EU, he did so in exchange for a Russian bailout of $15 billion. Many have opposed this decision since November, while others sympathize with the Ukrainian president and his stern decision-making in times of economic turmoil. Despite how you feel about the current situation in Ukraine, the fact of the matter is that any violence in an otherwise stable country will almost always translate into more safe-haven buying of precious metals.