Gold and silver have been trading sharply higher to begin the day but have since begun falling back to earth. Though this week is not expected to yield all that much economic data, today might very well be the exception. There has been a slew of data from Europe already released while the United States added its own report to ensure that investors would be busy all day today.
The crisis in Ukraine is still catching the attention of the marketplace but as no new developments have taken place thus far this week. Last Sunday a referendum vote took place that unofficially decided the fate of the Donetsk region of Ukraine. According to the vote, which was put on by pro-Russian rebels who have occupied the region, more than 90% of those who participated voted in favor of leaving Ukraine. Having said this, however, there are still widespread allegations that this referendum as well as the one that decided Crimea’s fate were rigged by the rebels who sanctioned them. For this reason and many more, investors will continue to keep a close eye on any and all developments stemming from Ukraine.
European Economic Data Intensifies Deflation Concerns
In the early morning hours of today the European Union’s latest industrial production numbers were made public for March. During the month of March, the EU’s industrial production was down by .3% and was down by about .1% on an annual basis. Germany’s consumer prices took a .2% hit in April but were up by more than 1% year on year. Finally, in France, consumer prices remained unchanged in April and were also slightly up on an annualized basis. Though these reports were not particularly awful, they did do well to increase worries with regard to widespread deflation across Europe. For this reason it is widely believed that the European Central Bank will implement some sort of monetary stimulus measure at next month’s policy meeting.
In other news, producer prices in the US were up by more than a half percent in April. As a result of rising producer prices the US Dollar took a bit of a dive today. The US Dollar has not really been performing well as of late and today’s decline allowed gold and silver to take advantage and post some gains themselves. As we head into the latter part of the week it will be interesting to see if precious metals are able to retain their current spot values or if they will fall right back down to where they were at the beginning of the week. As it stands, spot gold is just barely above $1,300/ounce while silver is just a few cents shy of finally breaking through the $20/ounce threshold once more.