Gold and silver finally halted their decline in the overnight and early morning hours as the marketplace seems to be pausing after a week-long series of losses. Gold was up a few dollars while silver was up a few cents in the early morning hours of Thursday, something we have not seen for a while. Some weaker than anticipated US economic data could be the reason behind why precious metals stopped their downward slide and has actually caused some people to question whether the Fed should be hitting the brakes on monetary policy anytime soon.

Calmer US Marketplace

The investment atmosphere in the US is much calmer on Thursday thanks to a Wednesday revision to the 1st quarter GDP of the United States. It was anticipated that 1st Quarter GDP would be up by over 2% when the concrete numbers came in a little under 2%. The first quarter GDP report being worse than expected has prompted some people to be wary of the idea of the Federal Reserve winding down monthly bond-buying.

Despite this GDP report, most of the other economic data out of the US recently has been quite strong and indicative of an economy that is well on its way to recovery. For this reason it is still a widely held belief that monetary policy in the US is gearing up for some big changes, maybe even as soon as the end of the summer.

Asian Markets

This week has been one of ups and downs for Asian markets, though lately that seems to be a recurring theme. A possible cash crunch which has greatly diminished  the spending each and every Chinese household is able to do is making investors worry about China and its prospects as the second largest economy going forward.

In addition to the possible credit crunch in China, physical demand for gold in India is very low. Typically, during the summer months, India is known to buy up a lot of gold, but a new tariff on imported precious metals is driving demand down. The Indian government placed a tariff on gold imports in order to help balance their trade budget.

The US Dollar Index is a bit weaker on Thursday after the greenback hit a multi-week high on Wednesday.

Price Movement

At the beginning of trading on Monday, gold was trading at a dollar or two under $1,300 and by the same time time on Thursday gold had lost a little over $60. This marks the second consecutive week of major losses posted by gold.

Silver did not fare much better as it began trading on Monday at $20.17 and by Thursday morning had lost well over a dollar to now be sitting at $18.85.

In the immediate aftermath of the Federal Open Market Committee’s meeting yesterday, precious metals were more non-reactive than anything. Having lost only marginal value, gold and silver seemed to be in an OK position heading into the last two days of the week. All of this changed, however, when markets opened on Thursday as metals had declines steeply overnight and were continuing along their downward trends through most of the morning. If the economic atmosphere around the world was uncertain prior to yesterday, the uncertainty level has risen significantly today.

Scared Marketplace

The only story market watchers and investors have been paying attention to this week was the Federal Reserve’s Open Market Committee meeting which began on Tuesday and ended in the afternoon on Wednesday. After the meeting had concluded it was clear that the FOMC would not institute any major changes to monetary policy in the US and bond buying by the Fed would remain the same in the coming weeks as it has been for a while now. This was good news for precious metals because an announcement indicating the imminent end to Quantitative Easing would have been disastrous.

Things took a turn for the worse during Ben Bernanke’s post-meeting press conference. During this address he alluded to the fact that bond-buying may be decreased in the coming months. While this contradicts what the supposed outcome of the meeting was, investors still weighted Bernanke’s words heavily. With bond-buying not a guarantee now like it was a year ago, the marketplace has become fearful and commodities such as gold and silver have been hit with some force today.

Stock Market Declines

Also in the wake of the latest FOMC meeting, major stock markets around the world experienced some deep declines on Thursday. Both Asian and European stock markets hit rough patches during the overnight and  early morning hours, but so too did US stocks during the first part of the day.

Bonds from around the world are also facing some heavy downward pressure today. The only entity of the world economy that is being helped by the FOMC meeting and subsequent press conference is major paper currencies. The US Dollar has made some decent positive gains which makes sense as most commodities are taking on heavy losses.

Economic data out of China that was released on Thursday indicated that the Chinese economy may be in the midst of a period of contraction. This is not surprising as we are well aware of the dire economic situations currently facing both Asia and Europe.

Price Movement

This week, more specifically the last few days, has been horrid for precious metals all thanks to the FOMC meeting. Gold started the week at $1,390 and by about midday on Thursday had lost over $100 to be currently sitting at $1,287.

Silver started the week at a little over $22, and is now down to under $20. These losses are unprecedented to say the least.

Gold and silver both lost some value in the early morning and overnight hours on Thursday though losses were not too major. There are some news stories out of Asia to report, especially after China took the day off to observe a public holiday yesterday. Investors continue to tread along acting as though easy money policies from around the world will be done away with any minute. With no major economic data to report on investors are looking for other ways of attempting to determine whether or not easy money will be a thing of the past.

Asia Back in the News

Last month may seem like over a year ago to many investors who have interest in Japan. Barely a month ago the Nikkei Index of the island nation was hitting record highs, but now it has lost over 20% of its value from that high point. Today alone the Nikkei Index lost 6%. This stock index is easily one of the most volatile in the world. With stocks declining at the rate which they are, it has given the Yen room to make significant gains against the US Dollar. It is really crazy how things can get flipped on their head in barely 4 weeks’ time.

After China took the day off yesterday, the Shanghai stock index hit a half-year low today. This is not surprising as both European and US stocks were trading lower on Thursday as well. Even the US Dollar Index opened up lower on Thursday.

Easy Money Worries

The underlying theme of the world marketplace is the collective investor fear that easy money will soon be nothing more than a memory. This fear is seen in the amount of investors who made it a point to reduce risk as much as possible this week. While declining stock markets are a point of concern for most investors, the large-scale abandonment of mid-level currencies from many parts of Asia should be too.

Next week may see some Quantitative Easing questions out of the US answered as the Federal Open Market Committee is set to meet on Wednesday. The discussion will center around current monetary policies and whether or not any changes should be made to them. It is uncertain what the verdict will be at the end of the meeting, but investors of all types will be hanging on every last word that is spoken both during and after that meeting.

Price Movement

Gold and silver have done quite a bit of moving this week, but by mid-morning on Thursday both metals were just about at the same point which they opened at on Monday.

Gold started the week at about $1,381 and by morning on Thursday was sitting at about one dollar less. Silver, on the other hand, started at about $21.65 and by morning time on Thursday was up about 10 cents.

Gold and silver both started the day on the up side of stagnant as the only movement recorded was minimal yet positive. As both the Bank of England and the European Central Bank had meetings today the world will fixate their attention on those two regions. While there is some light economic news to be reported out of the US, much more weight will be placed on tomorrow’s employment report which, as of now, is expected to show positive increases in non-farm jobs.

ECB, BOE Meetings

Today’s meetings for both the Bank of England and European Central Bank were policy meetings, though no major changes have been made. Both institutions announced that interest rates would remain the same, though this was to be expected.

As no real announcements were made, the marketplace did not do much moving in the wake of either meeting. The ECB’s press conference is also set to happen this morning, and this is where investors will be paying the closest attention. Though nothing major was changed during the ECB’s meeting, one would be inclined to think that some sort of discussion had to have taken place about the current state of the European economy.

US Economic Reports

There is some light economic news set to be announced on Thursday, but it is not expected to have much, if any, impact on trading today. What people will really be fixating their attention on is the employment report that will be announced tomorrow. It is expected that non-farm jobs in the US rose by nearly 200,000 this past May while the unemployment rate remained about the same at 7.5%.

Economic reports that are set to be released on Thursday include the weekly jobless claims as well as well as the Challenger job cut report. If you remember, last week’s jobless claims came in higher than expected, part of the reason why tomorrow’s employment report is crucial to so many.

Any news that contradicts the above could mean for a tumultuous day to close out the week tomorrow.

The US Dollar started the day on Thursday trading down, though it is doing better than the 4-week low it hit during the overnight hours. Up to this point this week has not been so beneficial for the US Dollar which is making it easier than it has been lately for gold and silver to make positive gains.

Price Movement

Gold has made some minimal moves forward this week, finally moving over the $1,400 mark. The yellow metal started the week at around $1,391 and by about 11 AM on Thursday it was sitting at about $1,407.

Silver started the week opening at $22.33 and by the same time on Thursday was sitting at $22.62. Though neither metal has made too drastic of a move forward, any positive gains are welcomed with open arms.

Gold and silver are both doing well in the early morning hours on Thursday as a decline in Japan’s stock market has done a good job of prompting investors to view gold as a safe haven asset. As of a little past 9AM, gold was up over 20 dollars while silver was currently up over half of a dollar on the day. As of now it seems like gold and silver may be in for a positive finish this week, though we still have just about 2 days left. Apart from Asian stock markets, the eyes of the investing world will be on the United States as a few economic reports are set to be released on Thursday.

Asian Contraction

Over the course of the past 3 weeks to a month, Asian stock markets have been performing at levels we have not seen for over half of a decade. This incredible run of form did a good job of destroying demand for gold as investors took their funds away from safe-haven assets and pushed them towards riskier investments that they hoped would pay off handsomely in the short-run.

After a few weeks of economic bliss, Asian stock markets, specifically that of Japan, lost inconceivable value on Thursday, and over the course of the past week. On Thursday alone, Japan’s Nikkei Index fell to the tune of about 5%, which brings the weekly decline up to around 15%. As we would have expected from such a large drop in the value of Asian stocks, safe-haven demand for gold improved dramatically.

Europe and US Economic Data

European stocks have shown mixed results on Thursday, though a more positive economic report did a good job of saving European stocks from a complete downturn.

Some US economic data will be watched over by the eagle-eyes of investors on Thursday including the  2nd quarter GDP reading as well as the weekly jobless report. Second quarter GDP is anticipated to show over 2 percent in yearly growth, while the jobless report is up in the air at this point.

With the future of monetary policy in the United States seemingly hinging on the next few weeks worth of economic data, investors will be eyeing these reports with inordinate scrutiny. Whether that is a good thing for precious metals investors has yet to be seen. A lot of things indicate that the US economy has recovered substantially from where it was at 2 years and even a year ago, though many are skeptical as to whether this improvement can and will be sustained or not.

Price Movement

Since the US took the day off on Monday in order to celebrate the Memorial Day holiday, gold opened Tuesday at about $1,395, and at almost 10Am on Thursday it was sitting at $1,414. This is a gain of almost 20 dollars on the week.

Silver opened Tuesday at $22.70, and in the morning on Thursday was sitting at about 23 dollars even. This constitutes a weekly gain thus far of about 30 cents. You have to keep in mind that while these numbers may not impress you, once markets opened on Tuesday both metals declined in value significantly, so $20 and 30 cent weekly gains are actually a testament to how well precious metals have done this week.

Gold and silver saw some gains in the early morning hours on Thursday as Japan’s stock market finally stopped doing so well. With the Fed’s announcement that Quantitative Easing the US possibly coming to an end in the next few months, it is unlikely that gold and silver will be able to sustain the positive gains we saw early in the morning on Thursday. Once again the marketplace is being as confusing as ever forcing investors to be on their toes now more than ever.

Japan Cools Off Momentarily

The US stock markets ended the day in disappointing fashion on Wednesday, and because of this the Japanese NIkkei index fell quite a bit on Thursday. As you would expect from a decline in the Japanese stock market, the Yen was able to gain in value, even if by only a little bit.

In addition to Japan’s stock market not doing so well on Thursday, European stocks were down as well. Do not expect this situation to linger for too long because the way Japan is devaluing their dollar, gains for the Yen will be few and far between. Perhaps something else that brought down stocks across the world was yet another slate of disappointing economic data out of China.

Though the US Fed’s announcement that QE might be ended sometime shortly down the road was negative for precious metals initially, it did not have the long-lasting negative effects that people had anticipated.

Weak Chinese Data

Something that was anticipated by all types of investors since Monday was the release of the latest Chinese manufacturing data. Lately, China has been severely under performing economically which has led many to question whether or not their economy is as strong as it was only a few years ago.

The data that was released on Thursday indicated that manufacturing in China has contracted instead of grown. Because of this data and all the declining stock markets on Thursday, gold was looked at as more of a safe-haven asset which prompted a decent amount of demand. Do not expect gold to continue to appeal to investors as a safe-haven asset because stock markets have been performing incredibly well lately, taking investor interest away from precious metals.

Price Movement

Gold started the week with an opening value of $1,365, and by about 11:30 on Thursday was up to roughly $1,380. This marks a current gain of about $15. Silver started the week at $22.42 and by Thursday it was sitting at $22.33. This was a minor loss of about 9 cents.

Gold is currently posting positive numbers for the week, but myself and many others are skeptical that these positive numbers will remain by the end of the day on Friday.

Gold and silver continue to slip in the AM hours of Thursday as there is more or less a perfect storm of world economic factors that are putting immense downward pressure on both gold and silver. Everything that could possibly be working against precious metals at this point is working against precious metals. Whether it be a strengthening US Dollar, surging stock markets, or a simple lack of investor interest in safe-haven assets, gold and silver are just not doing well. By about 10:30 AM on Thursday gold was down closer to 15 dollars while silver’s losses were closing in on 20 cents on the day.

Continued Decline

Over the course of the past few days it is no secret that both gold and silver are taking fairly large, and sustained hits in value. If you take a broader view of precious metals’ market trends, however, you will see that this decline is not limited to only this past week, or even solely the week before it either; it has been ongoing for the past few months.

If you look at gold’s spot value since November of last year, you will see that it’s spot value has been on a fairly steady decline. During this almost 7 month period, gold peaked at over $1,750, and is currently falling further and further below the $1,400 mark. This $300+ loss over the course of half a year is disheartening to those who have their fair share of gold holdings. One of the major factors causing this collapse that has not been seen in many years is the fact that world stock markets are now becoming much more idealistic places for investors to put their funds.

As risk on the open stock markets is becoming increasingly mitigated, investors see no reason why they should have to put their money into hard, safe assets such as gold and silver. It is not so much that people do not trust gold and silver as an investment, as much as investors think they can earn more money, faster by investing in certain stocks.

Weak Worldwide Demand

Perhaps another reason why gold and silver have not been performing too well as far as spot value’s are concerned is because of weak worldwide demand. Historically around this time of year physical demand for gold in Asia is very high due to a string of holidays, but this year the sentiment is a different one.

Though demand for gold and silver is low, this decline that we are in the midst of can be more blamed on economic factors worldwide. It is not so much that the economic situation around the world calls for investors to shy away from metals as much as the world economy is confusing investors to the point where they don’t even know what to do. Every day it seems as though the stories from parts of the world such as the United States and the European Union contradict what was reported just a day earlier.

Today is a perfect example of that as yesterday there was dismal economic news whereas today the news was that the EU countries recorded a substantially positive trade surplus this past March; something that has not been done in the region for quite some time. So long as economic news comes back as confusing as it has been, you cannot honestly expect investors to act consistently one way or another.

Price Movement

Gold started the week at $1,472 and as of about 10:30 Am on Thursday it was at $1,388, which was a loss of about $84 so far this week. Silver, on the other hand, started the week at $23.95 and as of the same time on Thursday it was down about a dollar and 25 cents to $22.70.

While gold posted some good gains on Wednesday, some overnight news out of China was to blame for the slow start on Thursday. By the time markets opened on Thursday gold was down about 5 dollars while silver, though down a few cents, remained relatively stable. The European Central Bank alluded to the fact that the eurozone economies may struggle more before they see any improvements. On the week up to this point gold is down almost ten dollars while silver is down closer to 40 cents. It seems as though this week is shaping up to be another disappointing one for precious metals.

China’s Ups and Downs

It is no secret that many people believe China’s economy is beginning to slow down and become only a shadow of what it was a few years ago, but the facts supporting that thought are beginning to mount. The most recent development out of China was that the Producer Price Index fell in April by a larger margin than was anticipated. This is a strong indication that production in China is slowing down considerably. To add insult to injury, inflation rates in the large Asian nation rose by 2 tenths of a percentage point more than what was expected. With this being the case, not many people would be surprised if Chinese monetary officials were to tighten their monetary policy in order to fight off further inflation.

Despite all of this economic data, physical demand for gold, whether it be jewelry, bars, or coins, has risen considerably over the past few weeks. According to Bloomberg.com, at least 30 tons of gold were sold between April 29 and May 2 in Hong Kong which left many physical dealers out of stock. The 30 tons of gold sold in that time frame was up more than 50% than was sold last year around the same time. Prices are still low so the yellow metal will continue to be bought up, especially by purchasers and investors in the Asian market.

Additional Interest Rate Cuts

Last week it was the European Central Bank cutting interest rates, but now we have interest rate cuts to report out of Australia, Poland, and now South Korea. It seems that whenever one large central bank makes a strategic move, other central banks fall like dominoes and follow these measures.

Australian officials cited a need to keep their economy strong and weaken their dollar as the reasons behind why they cut interest rates. These stories coupled with the fact that the USD index was higher in the morning on Thursday can be attributed to why gold has started out the second to last day of the weak in disappointing fashion. Though the price of gold has gained back a lot from its massive collapse a few weeks ago, the spot value for both gold and silver are still nowhere near what they once were. As of late, every time gold is approaching the $1,500 mark it seems as though the USD is strengthened which causes the yellow metal to take another dive.

Price Movement

Gold started out the week at about $1,471 and as of about 10am on Thursday it was down to $1,464 which isn’t too drastic of a loss but a loss nonetheless. Silver began the week at $24.20 and by Thursday it was down to $23.85. Both metals have great chances to rebound as there is still a lot of time left in the week to get their heads back above water.

Gold and silver have both been steadily improving since their monumental collapse only a few weeks ago. With spot values at their lowest points in a long time, it comes as no surprise that demand for both gold and silver has shot up in the wake of the recent decline. This week the major news stories were of a Federal Open Market Committee meeting as well as a European Central Bank meeting. The FOMC meeting yielded little shocking news, but the ECB meeting brought with it the announcement of the slashing of interest rates.

Europe in Shambles

It is no secret that the entirety of Europe is in the midst of some tough economic times and has been for quite some time now. Besides the rising unemployment rates in nearly every eurozone country, manufacturing and retail sales have been down as of late as well. With few jobs and even fewer periods of economic growth, investors have been shying away from the region.

In order to fix mounting debt problems, countries have considered liquidating their gold reserves as a way to bring in cash. This idea makes sense in theory, but it hurts a nation’s intrinsic value as well as the price of gold. Instead of selling off massive quantities of the yellow metal, Mining.com suggests that perhaps Europeans should invest in gold-backed bonds. In Italy, where the economy is as bad as anywhere, the population wholeheartedly disagrees with the selling of the country’s gold holdings. If instead of selling gold, the nation offered bonds that were backed up by gold, they would be able to kill two birds with one stone in that they can retain their gold as well as spur economic growth and investment by offering bonds of this type. Who knows if Italy is going to follow through with gold-back bonds, but most economists agree that it would not be a bad idea to do so.

FOMC Meeting

It’s that time of month again…FOMC meeting time. As is the case any time the Open Market Committee meets, speculation was in full force. This time the speculators were convinced that we would hear some news pertaining to the end of the Fed’s Quantitative Easing initiative. When the dust settled the FOMC meeting was fairly uneventful. Not only were there few major headlines from the report, the committee did not give any indication if or when QE was going to be stopped.

It is hard to say if QE is doing its job for the economy as one week numbers will be up and the next week numbers will be down. QE is undoubtedly good for both gold and silver and it would be a real shame should it be wrapped up any time soon.

Price Movement

Gold opened up the week hovering at around $1,466, and at about midday on Thursday it was sitting at about the same position. Silver opened up at about $24.11 and as of noon on Thursday it was trading down about 30 cents or so.

Prices for both silver and gold are still at bargain levels and if you are interested in making a purchase check out our online silver dealers page.