Week of January 6th Silver Market Update

Gold and silver spot values are posting impressive gains for a second consecutive day this week, thanks, in large part, to growing concerns over the stability of the global economy. Typically, a New Year brings about changes, but the turning over of the calendars this year has seen the market’s focus change very little. Investors are just as concerned now about things like the value of crude oil, economic standing of periphery EU economies, and the future of monetary policies in the US and the EU as they were throughout the course of the last few months of 2014. Hopefully, in the coming days and weeks, investors will utilize the forthcoming economic data from around the world in order to make investing decisions to kick off this New Year.

So far, this week has been relatively quiet from an economic data standpoint, but there was one important piece of data made public from the US a day ago. According to the report, home purchases on the part of younger Americans is on the rise and will continue to be so long as the US and global economies perform well. The report cited things like an improving jobs market as a major contributing factor behind the move to purchase a home as opposed to remaining a renter. With that said, however, there is no saying whether the global economy will continue to perform well, as some very real concerns have been raised recently.

Investor Concern Palpable During Early 2015 Trading

Though the previous section commented on how home purchases are growing as a direct result of a growing US economy, the global economy has become a concern for investors through the early parts of this New Year. Yesterday saw the price of oil dip below $50/barrel for a few moments, and this was enough to send the market into a bit of a panic. Shortly after oil dipped to that unforeseen low, stocks in the US and Europe began selling off at a rapid pace.

The same sell-off that took place on Monday has carried over into today as equities continue to trend downward. This downward trend is helping gold and silver simply because safe-haven demand has perked up (as it usually does when people grow wary of the economy).

As we advance through this week and into the next one, the attention of investors will gradually shift to upcoming meetings on the part of the FOMC and ECB. With it being widely expected that the European Central Bank will announce the institution of a large-scale quantitative easing program, it is no wonder that this meeting is of such importance. At this point, however, there is no concrete evidence pointing to such an announcement being made at January’s ECB meeting.

Posted in Market Updates

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