The spot values of precious metals declined across the board for yet another day today. The quiet market atmosphere in conjunction with a stronger US Dollar have been two factors forcing precious metals downward in recent days. While I anticipate that the last day of the week will remain just as quiet as the last four days have been, next week is expected to play host to just a bit more economic activity than this week.
In news on the geopolitical front, a ceasefire in Ukraine appears to have held true for yet another day. In fact, Ukrainian military officials claimed that Russian troops and tank units have now moved back across the border and away from the war-torn regions of Eastern Ukraine. While the ceasefire is encouraging, it will be interesting to see if it leads to more sustained peace, or if this is just a minor stop of the violence in order to allow warring sides to reorganize.
Finally, last night saw US president Barack Obama announce his plans for how to tackle ISIS militants in Iraq and Syria. According to Obama, the US will ramp up its air strikes but will refrain from placing combat boots on the ground. This much was expected and did not really have much of an impact on the marketplace when things opened up today.
Raw Commodities Given Boost On Quiet Day
Though by looking at spot values alone it may seem hard to believe, but raw commodities were given a marked boost today by a few small economic reports. From China, an August CPI report showed that China’s CPI grew by only 2% during August on an annualized basis. This data fell short of July’s 2.3% CPI increase and also fell short of 2.2% growth expectations. What it did do, however, was give precious metals a boost as investors are now convinced that the Chinese central bank will hold off on any imminent measures to tighten monetary policy. This gave all raw commodities just a bit of underlying support.
With this support, gold and silver spot values were able to perhaps prevent today from becoming a day of even more severe losses. It will be interested to see what next week, along with its flurry of economic activity, has to bring. The FOMC meeting along with a referendum on Scottish independence will take up a good bit of the market’s attention.