Gold and silver are trading near even on Wednesday after both metals lost a good amount of value on Tuesday. This week has thus far been quiet on both the economic and geopolitical fronts around the globe. Japan’s central bank concluded their monthly meeting today but made no changes to their monetary policy.
The investing world is anxiously awaiting next week’s Federal Reserve policy meeting as it is seeming increasingly likely that the FOMC may taper QE by another $10 billion per month. As it stands, the Fed’s easy money policy sees $75 billion worth of bonds bought each month, down from $85 billion a month ago. The prospect of more tapering is currently weighing on the short-term and long-term prospects for gold and silver.
More Good News Out of Europe
The last few months have yielded little else besides positive economic data out of the European Union. What was once one of the hardest hit regions by the worldwide recession of 2008 is now an economic region growing at a high rate of speed. An early morning report out of Spain which said that demand for 10-year notes is on the rise added to recently strong EU economic data. To that end, yesterday yielded a similar report with regard to demand for bonds in Ireland and Portugal. This report was of particular interest to investors simply because the Irish and Portuguese economies were some of the mostly harshly effected by 2008′s recession.
So long as some of Europe’s smaller, weaker economies are able to continue to build upon recent successes the whole region will undoubtedly have a better year this year than they did in 2013. The strong data from the EU (and the US) is also translating into increased investor interest in European equities, of which have been on a solid bullish run of late.
In other news from around the world, China’s central bank recently decided to inject a cash stimulus into their economy. The central bank cited a need to ward off rising interest rates as well as a need to fulfill citizen cash requirements as reasons behind the stimulus. With the Lunar New Year scheduled to be celebrated at the end of the month the Chinese are requiring more cash in order to buy gifts, travel, and do just about anything else associated with the ages old holiday.