Gold and silver opened up Tuesday solidly higher as market bears appear to be waving the white flag, after what has been an impressive run. Outside markets are also in a bullish position for precious metals as the US Dollar is lower and crude oil prices are on the rise. Over the course of the past 24 hours or so, gold has picked up over $40 while silver regained just over a dollar. With the FOMC policy meeting just around the corner, speculation with regard to the timing of QE’s tapering is echoing throughout the world marketplace.

Despite gold and silver having a fairly dismal run recently, things may finally be turning around for precious metals.

Mario Draghi Announcement

In the early parts of Tuesday, it was reported that ECB president, Mario Draghi commented on the EU’s low inflation rate. In his remarks, Draghi said that it is becoming more and more likely that the EU will avoid a deflationary period. The incredibly low inflation in Europe had many investors and market watchers expecting a period of deflation, but thanks to the ECB’s decision to cut its key lending rate deflation seems like a far-fetched possibility now. Japan, on the other hand, is looking like it will not be as lucky as Europe as deflationary fears have surfaced in Asia.

Investors Grow Anxious

With December’s FOMC policy meeting scheduled for December 17th through the 18th, investors are waiting anxiously to see if Quantitative Easing will finally be tapered. Though it has been thought that QE might be tapered for the past 6 months or so, at no point in those six months did it seem as likely as it does this time around. With economic data out of the US being strong recently, some investors have grown confident that QE will be tapered before the end of the year.

At this point, however, a tapering announcement will likely not have too big of an impact on the spot values of precious metals. The reason for this is because the gold and silver markets seem to have already adjusted to a world with reduced Quantitative Easing. Over the past few weeks the spot values of gold and silver have fallen enough and investors are confident enough in a tapering announcement that it is unlikely silver or gold will decline as drastically as some people originally thought. We have all been expecting tapering for so long that an announcement will not change all the much.

Nonetheless, the undivided attention of the marketplace will be focused on the Fed in the early parts of next week.