Precious metals began early US trading trending higher, but as the day wore on a stronger greenback ended up pushing spot values down again. The first half of this week has proven to be unusually quiet as the focus of the market centers on currency markets. A San Francisco Federal Reserve survey was released today and it has investors rethinking what they though they knew about the future of interest rates.

On the geopolitical front, the attention investors have been placing on the situation in Ukraine has almost all but evaporated. A ceasefire between Russian/pro-Russian and Ukrainian forces seems to be holding, and humanitarian efforts are playing out in many of the hardest hit areas of Eastern Ukraine. Despite investors more or less ignoring the calmer atmosphere in Ukraine, there is no doubting that the situation is still a powder-keg and threatens to blow its top at any moment. As such, we will continue paying close attention to everything that takes place in Ukraine over the coming days and weeks.

US Dollar Continues to Move Higher

The US Dollar was reported as hitting a 14-month high against the Yen while simultaneously recording a fresh 13-month high against a basket of rival currencies. Despite last week’s sub-par employment report, the investing world is growing increasingly confident in the strength of the greenback. A Federal Reserve survey released today indicated that perhaps investors are underestimating the degree to which interest rates in the US will be raised. This news alone gave the US Dollar quite a noticeable boost.

In other news, there is a growing belief that Scotland will vote Yes for independence in the coming weeks, and this belief has the value of the British Pound trending downward. As you could have probably guessed, the fleeting Pound only provides the US Dollar with that much more of a boost. As the rest of the week plays out, I imagine that the focus of the market will remain fixated upon the progress, or lack thereof, of global currencies.

So long as the market remains as bearish as it is at present, there is no saying just how the next few weeks will pan out for precious metals. Spot gold is now trading at a near 3-month low and is not looking like it will be receiving support anytime soon. With that said, it will definitely be interesting to see how the duration of the week plays out.