Both gold and silver are showing signs of strength for the third consecutive day, as the US Dollar has been stopped in its tracks by the British Pound. Janet Yellen’s inaugural address to Congress is still catching the attention of the investing world, though the only real connections able to be drawn after her remarks yesterday was that she seems very similar to her predecessor, Ben Bernanke.
We are still seeing healthy safe-haven demand for gold and silver, but risk-appetite amongst investors may be on the rise in the wake of news that the US government may raise the debt ceiling without too much fuss from Democrats or Republicans. As it stands, gold is swiftly approaching the $1,300 threshold and is showing few signs of weakness.
Chinese Economic Data, BOE Outlook Upbeat
After a few weeks of consistently poor pieces of Chinese economic data, the marketplace was finally greeted with some good news in the early morning hours of Wednesday. A report with regard to Chinese exports claimed that January exports were up over 10% on an annual basis. Considering exports were only expected to have increased by about .1%, it is safe to say that many Chinese investors were pleasantly surprised. Chinese imports were also reported as being up over 10% in January, a number that also handily beat market expectations. These two reports coming from the economy that purchases more precious metals annually than anywhere else in the world works as a bullish factor for gold and silver.
Transitioning to the other side of the globe, the Bank of England increased its expectations for annual GDP growth today. The BOE officially increased their expected 2014 GDP growth from 2.8% to 3.4%. England’s central bank also announced that the unemployment rate is expected to drop to at or near 7%. If the unemployment rate does fall as expected, the BOE may finally be prompted to increase its interest rates. Towards the end of the summer, BOE head Mark Carney made it clear that requests to raise interest rates would not be entertained until the unemployment rate declines further.
Expect the duration of the week to be fairly quiet as far as trading activity is concerned, mostly due to a lack of any noteworthy economic reports from the US.