Gold and silver have been doing dismally lately in large part due to a mix-bag of economic conditions in both Asia and the United States. With the Japanese and US stock markets doing incredibly well, coupled with the fact that the USD is also doing well, gold and silver have little room to make any positive ventures forward. The early morning hours on Monday saw gold and silver both open disappointingly, but as the day moved on both metals righted their losses and even moved in positive directions. There is little doubt in my mind that precious metals’ gaining some value today can be attributed to increased demand due to decreased prices over the past week.

Chinese Housing Report

On Monday there was yet another headline out of China which has caused even more people to believe that their economy is fading into the background. Housing price in the large Asian nation had risen 2 to 3 percent this past April. The reason we cannot give you a solid answer as to by just how much the housing prices rose in China because a lot of the stories have conflicting numbers. One article says housing prices rose by only a little over two percent, while another report claims prices have risen by almost 4 percent. Regardless of how much prices have risen, none of the numbers that were released were good ones.

You can add this report to the growing list of reasons why China’s economy is becoming less and less attractive as the days and months progress.

The United States Federal Reserve is currently debating whether and when the Quantitative Easing policy should be wound down, according to the president of the Federal Reserve bank in Dallas. If QE is brought to an end anytime soon this will undoubtedly be bad news for both gold and silver. The rumors of QE’s ending were enough to bring gold and silver down a little bit, so one can only imagine what will happen should an announcement be made anytime soon regarding the end of the monetary easing policy.

Yen Fighting Back

The Bank of Japan has been employing a monetary policy that works to devalue their currency, the Yen. This program has done a great job of bring its value down in comparison to the US Dollar, but on Monday the Yen rebounded a bit. This rebound is being attributed to short covering by investors as it is likely the value of the Japanese currency will not continue its upward trend for very long at all.

The Japanese and US stock markets have been performing well and this is one of the major reasons why gold and silver have been doing so terribly lately. Anytime stock markets do well, especially in the US and Japan, investors tend to shy away from safe-haven assets such as gold and silver.

Looking Ahead

As we move forward with this week it will be interesting to see if gold and silver can build upon Monday’s fairly impressive results. After gold picked up roughly 30 dollars and silver improved to the tune of a little over half a dollar, investors will be hoping they see similar results over the course of the next 4 days. With that being said, no one is getting their hopes too high about precious metals’ prospects for this week as we have seen solid Monday gains become nullified and voided later on during the week before.