After declining a decent bit a day ago, spot gold and silver is rebounding as it is becoming clear that precious metals bulls have the near-term control/momentum. While profit-taking was the main reason behind metals’ decline yesterday, some positive US economic data didn’t do the metals any favors. The most upbeat report released yesterday indicated that sales of new homes in the US rose by nearly 10% this past January. This was the largest such single-month increase in nearly 5 years and only added to the pressure being placed on gold and silver.
Today, investors will be paying attention to Janet Yellen’s address to the US Senate Banking Committee, an address that was originally scheduled for a few weeks ago but had to be postponed due to terrible weather hitting the eastern US.
Investors Hope to Gain Insight From Yellen’s Speech
Due to a recent run of poor US economic data, investors have been growing more confident that the FOMC will hold off on intensifying tapering at their next meeting. This growing notion is helping gold and silver in the near-term, though what the FOMC actually does as a result of their meeting will have the real, lasting impact on metals. Barely a week ago, the Fed made it clear that a small run of poor data is not enough to undo the last few months’ worth of upbeat data, but as the US economy is showing increased signs of weakness the more confident investors become that the tapering will have to be postponed, at least temporarily.
Investors will be paying attention to everything Janet Yellen has to say today in hopes that she will offer some clear insight into what will happen as a result of the next FOMC meeting. Realistically, however, Yellen will likely only reiterate her upbeat outlook on the US economy and will remain mostly vague in her commentary.
As we head into March next week, investors and the world alike will continue to pay attention to the ongoing civil unrest in both Ukraine and Thailand. Up to this point, these two situations have driven safe-haven demand for gold and silver and will continue to do so until everything is resolved.