Gold and silver ended up making small gains on Monday as the last official week of summer got underway. After gold crossed over the $1,400 threshold overnight, most of the day was marred by a corrective bounce which saw gold lose almost ten dollars at one point. As the day wore on gold managed to regain all of its losses and come out on top by making a few dollars of gains, silver too bounced back from its midday losses to end up making about a dime in positive gains.
Some recent weaker than expected economic data out of the United States has taken some wind out of the sails of those who believe that QE will be wound down by the end of 2013.
Further QE Speculation
With the constant debate amongst investors and traders centering around the future of monetary policy in the United States, every bit of economic data has been watched over and analyzed closer than usual. Up until this past Friday, most of the economic news out of the US had been positive. Last Friday investors were greeted with a sub-par housing report which ended up being the catalyst for another large upswing for the spot prices of gold and silver.
Today, it was reported that durable goods sales in the US fell by over 7% in July, more bad news for those who believe QE will be done away with before 2013 comes to a close. Despite the worldwide and US economic atmospheres being perfect for QE to be retained as a monetary policy for the US, some market experts believe otherwise.
In the wake of a central bankers meeting that took place in Jackson Hole, Wyoming, a group of economists were polled and the results of the poll show that the overwhelming majority believe that QE will in fact be wound down, most likely starting in September. While this may be so, the only time when we will get real news regarding monetary policy is when the FOMC meets sometime this upcoming September.
A UK public holiday this Monday, and the Labor Day holiday next Monday, means that the summer days are coming to a close. While the trading atmosphere may be quiet today and has been for the past few weeks, things will likely increase in intensity as we move into September.
Because of recent economic and political happenings, investors around the world have been more readily turning to gold and silver as a way of allocating their investing funds. Seeing as there have been drastic upswings in the spot values of both gold and silver recently, demand for precious metals has been shooting upwards as well.
