For the third day in a row this week, both gold and silver were losing value before US markets opened. In the early morning hours on Wednesday, silver was down a little over 40 cents while gold was down a few dollars over ten. As investors continue to shy away from precious metals it is no surprise that gold, and most other commodities for that matter, are continuing along their downward trend. As the Japanese Stock Market and the US Dollar continue their moves upward and onward, gold is left on the back-burner for most investors.
EuroZone Issues Continue
While on Tuesday it was reported that industrial output across Europe was up by a margin that had not been seen in over a year, Wednesday brought with it the same old disappointing news that we have come to expect out of Europe. Not only did the euro currency continue to fall in comparison to the USD, GDP for the first quarter of 2013 came in negative.
The first quarter GDP of this year came in at negative .2% when compared to the final quarter of 2012. This news, coupled with a number of other outlying factors, is likely going to push the European Central Bank to stick to its current monetary easing measures.
Though this next bit of news does not necessarily involve the European Union, it is very much a part of Europe. The Bank of England has released an official statement saying that the UK’s economy is in recovery, though the process is likely going to take a bit of time before a full recovery is realized. More currency stimulus is going to be in place in England until their economy is functioning on what they deem to be an appropriate level.
Commodities Being Avoided
As the USD continues to gain value, investors continue to shy away from raw commodities such as gold, silver, and crude oil. While stock markets tend to be filled with high amounts of risk, the Japanese stock market is showing that risk can be mitigated, even if only in the short run.
The Nikkei stock index in Japan has been hitting multi-year highs on a consistent basis lately while the Yen continues to become even more devalued in comparison to the USD. It seems as though Japan’s newly implemented monetary easing measures are working well for the country, but only time will tell if this is going to continue.
Looking Ahead
There is some economic reports out of the US that are set to be released today, but it is not anticipated that they will have too much of an impact on precious metals. Some of the reports set to be released are the MBA Mortgage Applications report, the PPI (Producer Price Index), and Industrial Utilization and Capacity report.
As I write this, gold and silver continue to fall in value which means it is shaping up to be yet another disappointing day for precious metals.