Gold and silver both did not move very much today amid a quieter trading atmosphere as most people are gearing up for Tomorrow’s Thanksgiving holiday. While metals didn’t move all that much, there was plenty of US economic data for investors to talk about. Not only that, but a minor military incident in the East China Sea has also caused a small stir amongst investors.

Expect tomorrow to be the quietest day of the week as most of the American workforce will be taking the day off in order to be with their families and friends.

US Economic Data

Though there was a moderate helping of economic data released today, it was neither wholly positive or wholly negative. As a result, the data investors were greeted with today did not end up helping precious metals out at all.

The mixed bag of economic data pushed the US Dollar a bit higher which in turn caused the spot values of gold and silver to decline, but only slightly. In America, investors are mostly focusing on their families and their preparations for the holiday tomorrow. Though there will be no economic data or news stories to talk about tomorrow, Friday may bring with some news from other parts of the world, namely Europe.

Incident in East China Sea

In the early morning hours of Wednesday reports began circulating with regard to a seemingly minor military incident in the East China Sea. It was reported that US military aircraft were spotted flying over a hotly disputed chain of islands that both China and Japan have called their own. Though the islands are uninhabited, both Asian nations want them due to the strategic location and possible natural resource reserves.

From the looks of it, the US’ decision to fly over the islands was provocative in nature and it will be interesting to see what the Chinese government or military has to say about the matter. Seeing as the US is allies with both Japan and China, it seems like a strange move to silently pick sides in the matter. Though it is not expected that this situation will escalate in any capacity, safe-haven demand for precious metals got a tiny lift from the incident.

Gold and silver dropped to a new 5-week low in the early parts of Wednesday ahead of the release of the latest FOMC minutes. While the minutes’ release is the marquis news story of the day, there are also plenty of economic reports due out today as well.

As gold continues to decline many investors are hoping that today’s news will help give precious metals bulls momentum while stripping it away from the bears who have been in control for the past few weeks.

FOMC Minutes, James Bullard to Speak

The Federal Open Market Committee is an arm of the Federal Reserve tasked with developing and maintaining monetary policy in the United States. For the past few years the dominant monetary strategy employed by the FOMC is what is known as Quantitative Easing. QE is an initiative that sees the government buy up billions upon billions of dollars worth of bonds each and every month. The purchasing of bonds translates into more money being pumped into the US economy and is supposed to translate into increased economic growth. Up to this point, most would agree that QE has thus far done a good job, on the other hand however, there is a strong contingent who believes that QE has not yet fulfilled its purpose and is still necessary to preserve and hopefully grow the strength of the US economy.

For the past few months it has been a hotly debated topic; whether or not to reduce Quantitative Easing. The side supporting the reduction (or tapering) of QE holds that the monetary policy has done all it could have possibly done and is no longer needed. These same people view QE as a type of unnecessary crutch which the US economy has relied and will continue to rely upon for all of its strength. The other side of the coin, however, exhibits a strong belief that QE should be retained to further economic growth and reduce the unemployment rate. In fact, Janet Yellen, Ben Bernanke’s likely replacement as Federal Reserve chairperson, spoke recently about her support of Bernanke’s QE policy. Most market experts agree with this side of the argument which is why many people are not expecting today’s FOMC minutes to yield any major, telling clues about monetary policy’s future in the United States. Nonetheless, investors from across the globe will be paying attention to the FOMC minutes and scrutinizing and analyzing every last word.

Also scheduled for today is a speech by the president of the St. Louis Federal Reserve bank, James Bullard. Mr. Bullard, who is a known supporter of the retention of QE, will likely make comments and justifications for why he and his colleagues feel that Quantitative Easing is a necessary policy to keep intact. All of this Fed activity stands the chance to move the spot values of gold and silver, though we will have to wait until Mr. Bullard speaks and the minutes are released until we see which direction metals head in. If the minutes offer no substantial clues with regard to Quantitative Easing’s future and James Bullard speaks in favor of keeping Quantitative Easing in tact, today might just end up being a positive one for gold and silver.

Though spot values have leveled off a bit, both gold and silver are still very much on the decline. After last week’s strong run of positive US economic data and the decision reached by the ECB with regard to their key lending rate, things have gone downhill fairly quickly for the prospects of gold and silver.

Now, amid a quieter trading atmosphere around the world this week, gold and silver are still feeling the heavy downward pressure being placed on them by the surging US economy and Dollar.

Last Week’s Better Than Expected US Economic Data

With the end of the year fast-approaching, it is time for investors to begin speculating about what they think will happen to Quantitative Easing monetary policy. With recent economic data beating market expectations by a long-shot, the belief that QE will be tapered before we turn the calendars to 2014 is once again catching on.

Last week we witnessed both 3rd-quarter GDP and October’s employment report come back far better than what was expected. While 3rd-quarter GDP for the US was expected to rise by no more than 2.5%, the report showed that GDP had actually increased by a margin of 2.8% since last year’s third quarter. On Friday, October’s employment report showed that non-farm payrolls had risen by almost 100,000 more than expected. Compared to market expectations of about a 120,000 increased in non-farm payrolls, October’s employment report showed that payrolls had risen by about 204,000. These two reports are of extreme significance to the investing world, and because of them the US Dollar surged while the spot values of silver and gold dropped off quite a bit.

Since members of the Federal Reserve in the United States have been calling for a consistent run of economic data before they entertain the idea of tapering QE, investors are latching on to the idea that this most recent data is the beginning of that consistent run. Now, many investors are looking ahead to December’s FOMC meeting as the time when the tapering of QE will be announced. With little evidence to back that belief up, however, this is just mere speculation at this point.

Gold and silver have gained a little bit of strength on Wednesday, in the wake of a less than stellar past few days; stretching into last week. The world marketplace is focusing heavily on the upcoming European Central Bank meeting, which is set to yield a major shift in European monetary policy.

Stronger US economic data has been reported in the early parts of the week, something that has helped the US Dollar make substantial gains against the euro currency, which has declined in value steadily as of late.

ECB Meeting Means A lot for Many

Last week’s reports of incredibly low inflation rates across Europe, coupled with the fact that economic recovery across the region isn’t hitting on all cylinders has prompted many to believe that the European Central Bank will loosen monetary policy by slashing rates at its upcoming meeting. The growing belief that the ECB meeting will yield an alteration to monetary policy has caused a sharp decline in the euro currency which prompted a sharp rise in the value of the US Dollar.

Gold and silver were on the wrong end of this as the surging USD put heavy downward pressure on precious metals over the past few days. Stocks in Europe, however, are doing better than ever as the Stoxx 600 Index hit a high that has not been realized in about half of a decade. Even though stocks are rising on the notion that Europe’s key interest rate will be reduced by the end of he week, some experts are sure that this month’s meeting will yield no monetary policy changes.

With that being said, inflation rates are so low that the possibility of rampant deflation is growing each week. This is yet another reason why so many believe that the ECB has no choice but to reduce its key interest rate. Keep your eyes and ears posted in the coming days, as an announcement in regards to European monetary policy may come at any time.

Gold and silver have begun this week remaining more or less stagnant in the first three days. While there are plenty of underlying bullish factors for gold and silver, the market has also experienced enough bearish data to keep metals in check.

The Federal Open Market Committee’s meeting absorbed most of the attention in the first half of this week, while some US economic data also did its part in catching investor attention.

What the FOMC Meeting Means for Precious Metals

Having gotten underway yesterday morning and concluding this Wednesday afternoon, the FOMC meeting was the recipient of almost undivided market attention. Going into this meeting, the collective belief was that we would see no major alterations to monetary policy. When the meeting wrapped up it became clear that QE would not be touched, a positive sign for precious metals, though the Fed’s post-meeting statement ended up taking the wind out of gold and silver’s sails.

The Fed’s statement indicated that while the US economy is not as weak as it was earlier this year, its strength is not such that taking away QE, or even tapering it, would be a viable option at this juncture. The fact that the Fed made seemingly positive remarks about the US economy was enough to make the FOMC meeting not entirely bullish for metals.

Another piece of information which hit the presses on Wednesday was that of October’s employment report. Market expectations were that non-farm payrolls would have risen by about 150,000 during October, but actual figures came in closer to 130,000. This 20,000 payroll discrepancy hurt the US Dollar, which has done nothing other than decline or stagnate for the past few weeks.

The rising short-term interest rates in China are another talking point for investors, though that scenario really won’t affect precious metals markets unless the Chinese government decides to tighten their monetary policy. If that ends up being the case, this story could end up being a bear for precious metals.

European economic data has been positive this week but it has mostly been overshadowed by the FOMC meeting. So far this week gold and silver have not moved entirely too far from where they kicked the week off, but investors are hoping that the unchanged monetary policy and more less than stellar economic data will help push precious metals to make gains in the latter stages of the week.

Gold and silver have successfully recovered from losses posted during the government shutdown, as many underlying positive factors are helping brighten the long-term outlook for precious metals. While large gains were posted in the earlier parts of the week, Wednesday has been marred by a corrective pullback after recent gains. Profit-taking too has been credited with why gold and silver are not performing as well on Wednesday as they were only a day before.

With US governmental issues out of the news for now, investors are beginning to shift their attention to China, which has been emitting worrying economic news as of late.

What’s Going On In China?

With the US government shutdown having dominated the news for the past two weeks, it was almost impossible to pay attention to any other news stories. Recently, it has been reported that interest rates in China are steadily on the rise, a fact that is beginning to worry some investors. If interest rates continue to rise as they are now it is likely that China will be forced to tighten its monetary policy. This is bad news for the spot prices of gold and silver because tighter monetary policy usually means for a decrease in demand from from Chinese consumers.

Housing prices in China are also on the rise, another cause for concern amongst investors.

Stocks Declining Quickly

Yesterday, September’s employment report was finally released, over two weeks late. The market was expecting to see a rise in non-farm payrolls amounting to almost 200,000. In reality, however, the report indicated that non-farm payrolls had actually only risen by about 148,000. This news was disappointing to many, but Americans were happy to see the overall unemployment rate fall by .1% to 7.2%.

In response, stocks have fallen in value in both the US and Europe and investors continue to worry about what the future holds for US stocks.

It is also anticipated that the 2+ week government shutdown will negatively impact 4th-quarter GDP growth in the United States. If this is case, it is highly unlikely that the Federal Reserve will do anything to alter monetary policy. Prior to the shutdown, the widely held belief by the general public and members of the Fed was that the FOMC would reduce its monthly bond-buying program, known as Quantitative Easing, before the end of the year. Now that the US economy is expected to end the 4th quarter weaker than when it began it, the Fed will have no opportunity to do anything to QE.

As more delayed US economic reports are released, we will continue to monitor them and assess their possible impact on the current economic outlook.

After the US government had been shutdown for over 2 weeks, Senate leaders were finally ble to come to an agreement on both the budget and the debt ceiling. Even though the government is likely going to fully reopen as early as tomorrow, both deals are temporary to say the least.

Regardless, the fact that a deal was struck in the waning hours before the debt ceiling was reached and borrowing by the US government ceased resulted in a surge forward by most markets.

The Shutdown is shutdown

For the past two weeks, we witnessed a strong feeling of investor anxiety as the US government’s partial shutdown was quickly approaching the debt ceiling deadline. With Congressional leaders and the President more or less sitting on their hands, it seemed increasingly likely that the US would not pass a budget or raise the debt ceiling before the October 17th deadline when the US would begin to default on its loan obligations.

Now, just one day before the debt ceiling deadline, deals in regards to the debt ceiling and the budget have been reached. In terms of the budget, Congressional leaders on both the Republican and Democratic side agreed on a budget that is able to fully fund government operations until mid-January. It is a pleasure to hear that some progress was made, but what this story really tells us is that we may be forced to witness another government shutdown much like this one only a few months down the road. The hope is, however, that in the next 3 months or so Democrats and Republicans can figure out a long-term budget that is suitable for everyone involved.

As far as the debt ceiling is concerned, kitco is reporting that it was raised in order to allow the US to borrow until February 7th. This deal presents the same as the first in that, a few months down the road, we stand the very real chance of witnessing another Congressional dilemma much like the one we have experienced thus far in October.

Gold and silver have responded positively to the deals being reached by Congress and in the early parts of Wednesday have both made modest gains.

Though gold and silver have hit a bit of a speed bump on Wednesday, this week has thus far been marked by substantial gains posted by precious metals. There is a growing potential for an increase in violence in the Middle East, specifically Syria, and this news has caused the marketplace to take more caution with their actions.

Yesterday, it was reported that German Business Confidence grew for the fourth consecutive month as the European Economy is looking more and more like it has recovered from the economic recession we saw hit most world economies back in 2008.

The US Prepares to Take Action in Syria

Earlier this year, a story surfaced accusing the Syrian government of using chemical weapons against its own citizens. This story was brought to the attention of people and governments all over the world though no action was taken by anyone.

Now, it seems as though the United States is set to take military action in Syria, some feel in as little as a few days. While many American citizens abhor the thought of wasting more money on a war, it is looking more and more like war is on the horizon. These events have scared most investors and have not only caused a spike in crude oil prices but also put immense selling pressure on stocks around the world. Not only that, but safe-haven demand for gold and silver has picked up considerably in the wake of both the Asian currency crisis and the potential increase in violence that may break out sometime in the near future.

This violence is really serious because it could evolve into a much larger situation than it looks like on the surface. There is no saying how Syria, if attacked by the US, will respond. Many think that such drastic actions being taken by the US will translate into even more violence in a part of the world that seems to know nothing other than turmoil and strife.

Keep your eyes fixated on the major news outlets as they will likely be keeping a minute by minute ticker of everything and anything going on between the US and Syria. In addition to that, the Indian Rupee has continued its depreciation and is something every investor should be aware of.

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.

Precious metals have made some moderate gains in the early morning hours of Wednesday mostly thanks to some weaker than expected economic data out of the US. We continue to focus on Europe as the EU has been a hotbed of economic data over the past 7 days or so.

So far the week has been a positive one for precious metals as gold opened up the week on Monday making impressive gains. Tuesday saw the yellow metal post small losses, but those same losses were regained in the morning hours of Wednesday. Silver, on the other hand, has done nothing other than make positive gains so far this week.

Producer Price Index Report in the US

The piece of information investors were awaiting on Wednesday was the latest producer price index in the United States. It was reported that wholesale prices made no changes in July, though in June the same wholesale prices posted gains of .8%. Meanwhile, the core PPI for the United States made a minimal gain of .1%, a reading that was lower than the expected .2% rise.

This data has thus far helped spot prices make gains. Later in the day we expect to hear the president of the St. Louis Federal Reserve bank make a speech. It is likely that he will address Quantitative Easing’s future in some regard, though if he is anything like many other Federal Reserve bank presidents, his statements will likely be extremely vague and borderline misleading.

If Mr. Bullard makes no clear statement regarding Quantitative Easing today, investors are turning to the Federal Open Market Committee’s next meeting in September as the time where they expect to hear much more definitive information regarding monetary policy in the United States going forward into 2014.  As recently as yesterday, Dennis Lockahrt, president of the Atlanta Federal Reserve bank, stated that the most recent run of economic data from the US has not been consistent enough to say one way or another what the fate of QE is going to be.

EU Economic Hopes Looking Up, Partially

As if it wasn’t evident already by the last week or so’s worth of upbeat economic data, the EU has stepped out of the shadow of economic recession. In the wee hours of the morning on Wednesday it was reported that EU GDP rose by .3% during the second quarter of 2013 in comparison to the first quarter. This was good news though it was a bit disheartening to hear that the year on year GDP data for the EU was down by .7%.

Also happening on Wednesday was a German government 10-year bond auction which yielded positive returns of 1.80%; the highest such yield in over a year. This data as well as most of the data that has preceded it has helped grow confidence in the thought that the European Economy is continuing along its road to recovery.

Despite a much better outlook on the EU, this news did not really do much of anything to the overall spot price of gold or silver. With that being said, online and brick and mortar dealers of precious metals are reporting that sales and demand are both on an upswing.