Gold has moved very little in the early parts of Monday while silver has posted some fairly positive gains. This time last week the world was preparing for a Western military attack in Syria, and because of that tensions were incredibly high. As the week wore on, tensions calmed down a bit, though they were still high.
As we move into September, our attention will focus on the US Fed and what they will do to monetary policies as the 2013 year comes to a close. If monetary policy is drastically changed, this could mean for huge changes in the spot values of gold and silver. Monday is, as a whole, a fairly quiet day of trading due to the US celebration of the Labor Day holiday. This holiday marks the unofficial end of Summer and will also bring in a more intense trading atmosphere both in the US and around the world.
Syrian Tensions Stay Steady
Even though the Syrian civil war has been raging for over two years, Western nations have just recently decided to mull over the idea of involving themselves. The reason for this can be directly attributed to accusations of the Syrian government using chemical weapons against their own civilians. Even though the allegations have yet to be certifiably substantiated, both the US and UK governments are convinced that the accusations are true.
Last Monday it looked like the US would strike Syria in the next few days, though by the end of the week it was clear that the Obama administration was reconsidering its position. Now, Obama has a bill into Congress which is a formal request for permission to strike Syria. Time will tell if the Bill is passed, though the US citizens in general seem to want nothing to do with another war in the Middle East.
Even though gold has risen in value by over 15% since the end of this past June, many analysts believe that this upswing is only going to be temporary. The reason for this is because the US Fed stands a strong possibility of changing its monetary policy at their upcoming September meeting. If QE is wound down or done away with, investors should have cause for worry because the spot value of gold will likely be hurt.
Quantitative Easing works by pumping the US economy with loads of paper money in an effort to devalue the USD. This devaluation makes exports from the US cheaper and will increase demand for them. This increased demand will spur economic activity and many believe that that is exactly what QE has done thus far. Now, a large quantity of people think that QE has done its job and should be done away with, an action that will definitely be detrimental to precious metals spot values.
