February 19th Silver Market Update

Thanks to bargain-hunting, precious metals have been able to recover slightly after suffering pretty sizable losses through the first few days of the week. Like last week, this 5-day trading session has been mostly devoid of markets-moving economic data. Because of this, investors the world over have had plenty of time to focus on other scenarios unfolding across the globe.

The focus of the market has been drawn time and time again to Europe and the various situations unfolding there. This week, investors have had a Ukrainian ceasefire as well as Greek austerity negotiations to focus on. Both of these events have had only small impacts on the global market, but it is more than we can say about any other events this week. Asia has remained mostly quiet thanks to the celebration of the Chinese Lunar New Year, and will likely stay that way as we head into next week.

FOMC Minutes Deemed to be Mostly Dovish

The FOMC minutes from the Fed’s latest meetings are always of special importance to investors. The reasons for this are many, but most recently investors have been hoping to find out as much information as possible about the future of interest rates in the US. For the better part of the past 6-12 months, investors have gone back and forth on when they think interest rates will be raised, and how much they will be raised by.

Unfortunately, this round of FOMC minutes offered very little in the way of concrete information regarding interest rates in the US. In fact, if anything, yesterday’s minutes caused an increasing number of investors to believe that interest rate hikes will not be coming until at least 2016. Prior to yesterday’s minutes release, there were a large contingent of investors who were fairly certain we would see interest rate hikes sometime during this summer.

Market’s Focus Turns to Europe

Like was previously stated, investors have given the EU a lot of attention in recent weeks. A combination of a few noteworthy events and the fact that there is little else going on across the global economy has caused investors to focus on a wide variety of issues.

First, the market at this point last week was pleased to hear that a ceasefire agreement had been reached in Ukraine. Unfortunately, by this Tuesday, barely two days into the agreement, there were already widespread reports from both sides claiming that the other was violating the agreement. Now, on Thursday, it seems as though the fighting has more or less picked back up to where it was a little more than a week ago.

In other European news, the market has also focused on the ongoing talks involving Greece’s new government and their EU creditors. To the surprise of everyone, however, this week’s talks seemed to have gone well seeing as Greece is now allowed to postpone instituting some austerity measures and will be given a fresh injection of cash almost immediately. Thanks to this cash injection, the Mediterranean country will narrowly avoid a credit crunch that would have otherwise forced Greece out of the EU.