Gold and silver are trading higher but have not done all that much moving on what has proven to be a quiet second day of the trading week. Investors are currently having to deal with a lack of US economic data, but that much which change on Wednesday to some extent.
The crisis in Ukraine is mostly out of the news for now, but is still far from being resolved. Just this week, however, Russian president Vladimir Putin called for his troops stationed along the border with Ukraine to withdraw from their positions. Up until recently, the Russian military was building up a strong presence along its border with Ukraine as a type of threat to the Ukrainian military. Despite tensions deescalating a little bit, the crisis is still far from over as pro-Russian rebels continue to keep a stranglehold on much of eastern and southern Ukraine.
Light Week of Economic Data, European Economic Concerns
Investors in the United States are gearing up for one of the slowest economic weeks of the month this week. With that said, however, the all-important minutes from the FOMC’s May meeting are due out tomorrow and will be hawked over by investors who are hoping to gain some additional insight with regard to how tapering will carry on and when they can expect interest rates to be risen in the United States. The minutes will be released by midday on Wednesday, but it is not looking like they will have any major impact on the marketplace. Instead, most experts are expecting the minutes to do nothing more than reiterate the Fed’s positive stance on the US economy.
In other news from Europe, investors are becoming concerned with the strength of some periphery economic, specifically the Spanish and Italian economies. Bond yields in both European countries have been on the rise as of late and investors are becoming more convinced that the European Central Bank will have no choice but to implement some sort of monetary stimulus at their next meeting in June. If such is the case, there is no saying what new stimulus will mean for precious metals.
In most cases, fresh stimulus bodes well for the spot values of precious metals. This time around, however, a growing number of market experts are convinced that European monetary stimulus will only spell doom for gold and silver. The reason for this is that monetary stimulus will likely drive the value of the euro currency down, which will, in turn, cause the value of the US Dollar to rise. As is almost always the case when the value of the USD ticks upward, spot gold and silver may be feeling pressure. It is important to remember that all this is just mere speculation at present, but it stands a very real chance of becoming reality no more than a month from now.
