For yet another day, precious metals are trending downward as a result of stronger equities and a stronger US Dollar. Generally speaking, this week is not set to bring about too much in the way of markets-moving economic data. Instead, we will see the focus of the market shift towards the wide array of ongoing geopolitical events. Though the violence in the Middle East and Europe is supporting safe-haven demand for precious metals, US stocks and the US Dollar are doing so well that safe-haven demand is doing more to limit selling pressure than it is contributing to any gains being made by spot values. As it stands, gold is sitting below $1,300/ounce while silver is now below $19.50/ounce.
Global Central Bankers Meeting Draws Market’s Attention
Due to the is week being extremely quiet, investors do not have all that much to focus on or react to. As a result, the investing world is seeing its attention drawn to the Kansas City Federal Reserve meeting, which is scheduled to kick off on Friday. The meeting, which will be held in Jackson Hole, Wyoming, will see the world’s most prominent central bankers in attendance and making speeches. In past years, this very meeting has yielded speeches and addresses that are very insightful with regard to the future direction of monetary policies in the US, Europe, and beyond.
Because European Central Bank president Mario Draghi and Federal Reserve chairperson Janet Yellen are both expected to speak, it makes sense that investors will be paying attention. From Draghi, investors will want to hear what the ECB plans on doing with regard to recently dismal economic data. From Yellen, as has been the case for more than a month now, investors will be clambering to hear any information with regard to the extent and timing of raised interest rates in the United States. Because this meeting kicks off on Friday, you can expect to see a lot of speculation with regard to what might be said in Wyoming.
Apart from this week’s central bank meeting, the market does not have all that much else to pay attention to. While there will be continued focus on the violence in Iraq, Israel, and Ukraine, these events are not being as closely monitored as they were a few weeks ago. As a result, safe-haven demand for precious metals is not doing much in the way of uplifting spot values. Instead, it is simply helping gold and silver par losses and limit selling pressure.
