Week of February 17th Silver Market Update

Precious metals have begun the day on Tuesday trading significantly lower thanks to a host of factors that have been taking money away from the precious metals market. Not only are stocks performing better, but because gold and silver have not fare well over the past two weeks or so, their increasingly negative posture has prompted some selling.

For the days that lie ahead, the week is expected to be fairly quiet and lacking as far as economic data is concerned. With that being said, however, the market will have a few issues unfolding across Europe to pay attention to as they stand the chance of pushing spot values in one direction or another. Today, the market is most closely following the progress of debt reduction and austerity talks taking place between Greece and the European Union.

Market Focuses on Greek Bailout Talks

Like was stated previously, the global marketplace this week is focusing on what is happening between the European Union and Greek officials. At present, early indications are that the talks are producing more of a stalemate than anything else. Greece wants to roll back some austerity measures while the EU, namely Germany, will not budge on this issue. Keep in mind, the agreement(s) that Greece are currently in violation of were reached more than 2 years ago, so it is kind of hard to believe that Greece’s new government has much of a chance of renegotiating these agreements.

If something isn’t done soon, many experts believe that Greece may soon be facing a credit crunch that may push it out of the European Union. Because of this, the market is pay extremely close attention because what happens to Greece will have a much larger impact on the wider European Union. One growing belief is that, if Greece exits the EU, other, smaller EU countries may be prompted to do the same.

Stocks Jump Forward, Regain Multi-Year Highs

Stock markets across the EU and the United States have done better over the last few weeks and are currently taking a lot of the attention away from precious metals. So long as this trend continues, I imagine that metals will suffer further blows and suffer weekly losses for yet another week. Also not helping metals’ fortunes is the fact that crude oil has recovered a bit in recent days and is now sitting well above $53/barrel. If you can remember, the average spot value of crude oil was under $50 only a few weeks ago.

As market conditions change, it is looking more and more like attention is being drug away from the precious metals market. Of course, investors are hoping this will change, but with such little economic data and activity, that is not looking likely. Making the global marketplace even slower is the fact that many Asian investors are prepping to celebrate the impending Lunar New Year.

Posted in Market Updates

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