Gold and silver started the day up a little bit, but not by any significant margins. The majority of world investors are maintaining their current positions as we await the outcome of the ongoing Federal Open Market Committee meeting. Tuesday saw precious metals lose some value, but the early parts of Wednesday gold and silver gained back at least some of their losses. On the whole, there is little activity going on around the world as far as trading goes.
Asian and European Outlook
Asian and European stocks posted mixed results on Wednesday as both markets are in more of a stagnant mood during the FOMC meeting. The meeting itself will conclude sometime in the early afternoon and will be followed up by a press conference led by Federal Reserve Chairman Ben Bernanke.
Investors will be waiting to hear if the Fed will make any major changes to monetary policies in the United States. If any large changes are made to the current policy of Quantitative Easing, precious metals could move drastically in one way or another. If QE is done away with or going to be wound down over the next few months this could spell bad news for precious metals. On the contrary, if it is announced that QE will be retained in the near future this could possibly be good news for precious metals.
FOMC Speculations
The aspect of every FOMC meeting that remains the same is that investors all over the world will speculate as to what the outcome will be. Most times there is no clear-cut outcome of an FOMC meeting, though this time it is fairly certain that a monetary policy decision will be made.
A few weeks ago we heard that Quantitative Easing may be done away with, though more recently the sentiment has changed with many people under the impression that it may be kept around for a bit longer. With how well the US economy has been doing lately it would make more sense for QE to be wound down over the course of a few months. QE’s purpose was to bring t he US economy out of the recession we saw in 2008, and at this point most people would agree that it has done its job perfectly.
A little later today Ben Bernanke will say for sure what the future of monetary policy will hold for the US. If QE is kept around for any extended period of time, this should be positive for precious metals. One thing is for sure, however, no matter the outcome of the meeting today investors will be either buying or selling silver and gold like crazy.
Looking Ahead
As far as the rest of the week is concerned there are not too many major economic stories to fixate our attention on. The FOMC meeting is what most investors will be basing their next plans of action off of and thus is the biggest news story we have to focus on.
With that being said, it will still be important to focus in on how world stock markets are acting.