Gold and silver are appreciating in value as of the late morning on Monday, fueled mostly by a weaker greenback. Like last week, this 5-day trading session is expected to be mostly quiet and free of any noteworthy economic data. With that being said, there is still plenty for investors to focus on and even some small batches of economic data that can potentially have an impact on the marketplace. In case you missed it, the quiet end to last week saw gold and silver add value enough that the week wasn’t a total loss.
As we look ahead to the duration of this week, all eyes will be fixated upon the European and Japanese economies as they have been sources of great turbulence over the last few days. Just yesterday, Japan’s third-quarter GDP growth was so dismal that the Japanese economy is deemed as being in the midst of a recession. In Europe, talk of more accomodative monetary policies are abounding and only growing more serious upon the release of each new piece of sub-par economic data.
German Economic Expectations on the Up and Up
For much of the past few months, every time we mention the European Union economy it is usually to say nothing remotely upbeat. To put it bluntly, the EU economy is in some serious trouble and has been for quite some time now. While the European Central Bank has already taken action to spur economic growth (by lowering interest rates and purchasing stocks), none of their policy shifts have brought about lasting results quite yet. Just yesterday, ECB president Mario Draghi was quoted as saying that the ECB is still considering enacting the purchase of government bonds as yet another measure aimed at improving the economic conditions of the region. Because of these comments, it will be interesting to see just how much attention is paid to the next meeting of the European Central Bank.
Today, the string of downbeat European economic data was broken upon the release of the latest ZEW German economic expectations index for November. According to the report, which was released earlier today, the latest reading given came in at over 11 as opposed to expectations for a reading of under 1. Though these numbers may be foreign to you, they mean that perhaps the outlook on the German/European economy is not quite as bleak as originally believed.
Over the course of the coming weeks it will be interesting to see what type of data emerges from the European Union as it will more than likely have a major influence on the policy decisions that are made going forward. With quantitative easing intensified in Europe, you can bet that the value of the Euro may decline much further than it has already, especially with the US on the verge of raising interest rates sometime in the near future.
