Gold and silver have started the week having lost some value over the weekend as it seems the decline we saw begin last Thursday is not quite over and done with yet. Though bargain-hunting seems like it should be in full effect and thus pulling the value of gold and silver up, such is not the case just yet. With many world currencies experiencing heavy downward pressure and stock markets struggling to find solid footing, it seems as though the world marketplace outlook is changing before our eyes. With this week expected to be light as far as economic data is concerned, it is not looking like gold and silver will have too many opportunities to pull themselves up from their recent declines.

China Facing Mounting Problems

Over the course of the past month and a half or so we have seen the Asian economic outlook take a bit of a nosedive. Whether it be declining Japanese Stocks experiencing rapid declines or Chinese manufacturing output being at some of its lowest points in month, it is no secret that Asia is in the midst of a rough economic run.

China is perhaps the worst off lately as it is facing the possibility of a credit crunch at the same time its economic strength is being called into question. Despite these two issues beginning to take shape, Chinese monetary officials have been reportedly content with their current monetary policies and have no intentions of making any alterations. Many feel as though this is a mistake and if monetary policy is left unchanged the economic and credit scenarios facing China could become significantly worse.

Much of the recent Chinese economic turmoil can be at least partially attributed to last week’s FOMC meeting and subsequent Ben Bernanke press conference. This event last week has negatively affected markets all over the world, not just Asian ones.

World Currencies Facing Heavy Downward Pressure

Mirroring gold and silver’s rapid fall this past week, currencies such as the Australian and Canadian Dollars are also facing high selling pressure. It isn’t just the Canadian and Australian dollars either, as many of the world’s emerging currencies are also losing the allure they once had with investors. One of the few currencies that is doing well in the wake of last week’s FOMC meeting is the US Dollar which has gained value due to the circulating belief that monthly Federal Reserve bond-buying will be wound down soon. By limiting the amount of money pumped into the economy the greenback has no choice but to advance in value.

The euro currency is not doing too shabby either after some better than anticipated German economic data was released on Monday. The same cannot be said for European stocks as they are still feeling the effects of the Fed’s meeting last week.

Looking Ahead

On Monday the slate of economic data that is set to be released in the US is fairly light. Included on Monday’s economic news plate is the Chicago Fed National Activity Index as well as the Texas Manufacturing Outlook Survey. Both of these reports are expected to have little impact on the precious metals market, as are most of the stories we will be talking about out of the US this week. With few major stories to hang our hats on this week, it is unlikely that gold and silver will be able to make any sort of substantial comeback from last week’s monumental declines.

Do not count precious metals out completely, however, as they have made big, unexpected comebacks in the past which means they could just as easily do it again if the right story were to poke its head out.