Gold and silver finished the day about where they started it on Tuesday. There was a number of economic reports from Europe and the United States, though most of them had little to no impact on precious metals spot values. The market is continuing to concern itself both with the possibility of higher interest rates in the US and the prospect of a substantially declining Chinese economy.
The US and the EU have been attempting to punish Russia through diplomatic and economic means, but so far seem to have phased the Kremlin none. This will also prove to be a point of interest over the coming weeks as the situation between Ukraine and Russia sorts itself out.
Loads of Economic Data
There was a healthy batch of US homes data from February released today, most of which was on the stronger side. The US consumer confidence was also released today, though it wasn’t overly positive nor overly negative. For the most part, the market ignored a lot of today’s data and chose rather to speculate over the future of both the Chinese and US economies.
The US economy has recently made its way back into the spotlight thanks to comments made last week by Federal Reserve chairperson Janet Yellen. In her statements she made it clear that QE would be done away with by the end of this year and that interest rates in th4e country may be on the rise as soon as next spring. This forecast was much sooner than originally expected and caught a lot of investors off guard. Her statements worked against precious metals spot values for the sole fact that rising interest rates will make the ownership of physical gold and silver an unattractive prospect.
Finally, the market is still concerned with recent Chinese economic data, most notably the weaker than expected manufacturing data from yesterday. This data in conjunction with reports about Chinese companies defaulting on bond payments only serves to unnerve the investing world when it thinks about China. The rumor mill was operating at full capacity today and claimed that the central bank of China may soon be pursuing stimulus measures in order to help both their economy and financial system, but those report have yet to be confirmed.
Over the next few days we will closely analyze any and all reports stemming from China in order to figure out just how the country’s leaders plan on tackling this economic downturn before it spreads any further than it already has.
