Precious metals are moving upwards for a second consecutive day this week, fueled by some safe-haven demand and bargain-hunting buying. On the whole, this week is expected to be fairly busy, but things won’t really begin to pick up until tomorrow and Thursday. Despite the last two days’ worth of gains, it is going to take a lot more before spot values are able to regain the positions they were at 2 or 3 weeks ago.
On the geopolitical front, it seems as though the ceasefire agreement between pro-Russian rebels and Ukrainian military forces is continuing to hold. It has now been well over a week since the fighting has stopped, and there have been very few signs of increased tensions. With that said, however, there has also been no news with regard to serious peace talks taking place between the warring factions. As it stands, the fact that fighting is not as widespread as it was 2 weeks ago is weighing on precious metals. For months, the fighting and tensions in Ukraine provided underlying support for gold and silver spot values. Though things are calm now, there is no saying what the next few days and weeks will bring.
Markets Stay Relatively Calm Ahead of FOMC Meeting
There is no denying the quiet nature of the first few days of this week, but the fact of the matter is that things are going to pick up quickly from here. Today saw the latest Federal Open Market Committee kick off, but it won’t be until tomorrow afternoon when things are all said and done. Upon the conclusion of this week’s meeting, Federal Reserve chairperson Janet Yellen will address the media. Investors from around the world will be tuning into the meeting in hopes of hearing some concrete information with regard to the future of US interest rates. Unless you have been under a rock, you are probably more than well-aware that there is a growing belief that the US Federal Reserve will raise interest rates for the first time since 2006 sometime in the near future. What the phrase “near future” means, however, is currently up for debate.
As of the writing of this post, it seems as though a number of investors have decided that tomorrow’s meeting and post meeting statement will not yield much in the way of information regarding interest rates. This is seen in the upward movement of US equity markets and spot values. Also helping precious metals and other raw commodities was a report released during the overnight hour which claimed that the Chinese central bank is going to boost its ongoing monetary stimulus measures.
As we look ahead to the second half of the week, you can expect that things will be a good bit busier than they have been through Tuesday. Whether a busier market atmosphere is good for precious metals or not remains to be seen, however.
