Gold and silver have been up and down thus far this week, though for the most part the moving both metals have done has been minimal to say the least. So far this week investors have fixated their attention on a few different issues, the largest of which is a looming Asian currency crisis. Due to the declining value of both the Indian Rupee and the Indonesian Rupiah, investors are worried that more mid-level Asian currencies will follow suit and depreciate due to the higher interest rates that can be found in more prominent Western nations.
Not only that, but the ongoing violence in Egypt is something that has caught the world’s attention as well. Both of these incidents have boosted safe-haven demand for gold and silver. Today, we look forward to the minutes from the upcoming FOMC meeting to be released. This is big news, as anything having to do with the Federal Reserve and/or Federal Open Market Committee usually is.
Investors Anxiously Await FOMC Minutes
If you thought you were going to make it out of this week without hearing a story about the US Federal Reserve, you were wrong. This time around, investors are paying attention to the Fed due to a release of the minutes for their Open Market Committee’s upcoming meeting.
In these minutes investors are hoping that some light will be shed upon the future of monetary policy and what it entails. Currently there are roughly three schools of thought on the matter, first, people are positive that Quantitative Easing will be done away with by the end of the 2013 calendar year, secondly, others are convinced that even if QE is not done away with by the end of the year it will at least be tapered or wound down. Finally, the remaining thinkers are convinced that the United States’ is not sound enough economically to afford the abandonment of such a monetary policy.
Up to this point members of the Fed have made announcements which lend credibility to all three schools of thought, though, as you might expect, these same statements have worked to confuse the marketplace much more than they have worked to alleviate any worries investors have.
Though I, personally, think that these minutes will shed no light on the matter, I and many others like me are holding out hope nonetheless.
Asian Currencies Called Into Question
The Indonesian Rupiah and Indian Rupee currencies have been depreciating for the past week or so at a fairly rapid pace. This depreciation has helped gold and silver gain value, but it has also worried countless investors about the future of mid-level Asian currencies.
While both Indonesian and Indian government officials are working to alleviate some of the selling pressure on both the Rupiah and Rupee. these efforts have been met with little to no success thus far.
The overriding fear is that the declining value of the aforementioned currencies will translate into investors getting rid of all their mid-level Asian currency holdings. Thus far this has not happened, but to some this incidence seems very likely.