Precious metals were able to add some value today, but the week as a whole has not been very beneficial. Once again, precious metals are suffering from a marketplace that is mostly devoid of fresh economic data. The market has had time to focus on other things, however, including Janet Yellen’s address to Congress regarding monetary policy and the condition of the US economy.
If you are wondering why things are especially quiet this week, look no further than the fact that much of Asia is celebrating the Lunar New Year. While the lack of activity from Asia is having a negative affect on the market, the fact that the Lunar New Year is a time of gift-giving has given metals a bit of a boost.
Yellen’s Remarks More Dovish Than Anything Else
This week marks one of two times during the year during which the chairperson of the Federal Reserve is tasked with explaining the financial situation of the United States as well as what the future holds for the US economy to Congress. Yesterday, in Day 1 of her comments to Congress, Janet Yellen, Fed chairperson, made it very clear that while the US economy continues to improve, the Fed is in no rush to raise interest rates. Instead, she maintained that the interest rate discussion will take place on a “meeting-to-meeting” basis.
For investors, this is more or less exactly what was expected from Ms. Yellen. Because no new information regarding rate hikes was provided yesterday nor today, investors are slowly but surely becoming convinced that rate hikes might not end up taking place until sometime next year. Because of this growing belief, precious metals spot values were able to gain a little bit today.
As we look ahead to the final few days of the week, you can bet that things will remain just as quiet as they have been through the first half of this week. With that being said, however, there are a few month-end pieces of economic data expected to be made public from the United States. In addition to this, investors will be awaiting the release of the weekly jobless claims report as weekly claims for unemployment benefits have been on the rise for the better part of the past month or more. If that does not turn around soon, we have may investors questioning the actual strength of the US employment sector.