Precious metals are once again moving forward on Thursday, and once again safe-haven demand is the culprit behind the tick upward. Now hovering near 4-month highs, precious metals look to have finally overcome the restraints of a bearish market the consumed much of the latter part of 2014.
As investors become increasingly nervous and unsure about the global marketplace, I expect that gold and silver will continue to benefit. As it stands now, this week is looking like it will be the biggest week of gains metals have seen in quite some time. Of course, there still lies a significant quantity of economic data ahead, but early indications are that gold and silver will not be overly affected by such data.
SNB Makes Surprise Move to Un-Pug Swiss Franc
In a somewhat surprising move, the Swiss National Bank decided that it would get rid of the Swiss Franc’s peg to the faltering Euro currency. As a result of today’s move/announcement, stock, financial, and currency markets around the world were sent into a bit of an upheaval of sorts. Another thing that happened in the immediate wake of the SNB’s announcement was that the Swiss Franc made massive, 20% gains against the Euro.
For those who are unaware, the Swiss National Bank pegged the Franc to the Euro in an effort to mitigate rapid appreciation of the currency. Now, the marketplace has grown increasingly unsure and, as result, has flocked to safe-haven assets like gold and silver. This is likely going to continue to be the case as the Euro continues to decline and the ECB pursues easy money policies.
Poor Retail Sales Report Hurts Stocks, the Dollar
On Wednesday, the US was given its latest retail sales report from the month of December. Being that Christmas falls towards the end of the last month of the year, December is historically one of the better months as far as retail sales are concerned. This time around, however, such was not the case as it was reported that December retail sales fell by .9%. Experts were anticipating that this report would see an increase of at least .2%, so it is easy to see why stocks and the Dollar were immediately negatively impacted by this particular report.
Though gold and silver did not have the best of days on Wednesday, the fact that US retail sales came back much poorer than expected helped keep spot values afloat. Now, as we look forward to the last day of the week, it will be interesting to see if gold and silver can continue building upon this week’s gains or if a corrective pullback will bring spot values back down again.