Gold and silver are trading slightly upward today as a result of some short-covering and bargain-hunting. Most European and Asian traders are making their way back to the market today after an extended holiday weekend. So far, however, Asian and European markets have yielded very little in the way of noticeable price action. A lack of fresh bullish news is making it difficult for spot gold and silver to do anything other than continue to post modest losses as spot values continue to fall further below key technical points.
The crisis in Ukraine is continuing to deescalate as foreign leaders are working to devise ways of bringing peace back to the increasingly divided nation. Pro-Russia forces still have a decent presence throughout the eastern half of Ukraine, but the violence caused by these forces is only a shred of what it was a week ago. As tensions continue to decline so to will safe-haven demand for gold and silver. Decreasing safe-haven demand in conjunction with a lack of any new, fresh bullish news will continue to drive spot values below key technical levels.
This Week’s Economic Data Slate
From a US economic data standpoint this week is expected to be fairly quiet. What little data has been released already this week has had no impact on spot gold nor silver and it will likely remain that way as the week plays out. Apart from the weekly jobless claims report, due out on Thursday, the market is not expecting to hear anything new from the US economy.
While economic data in the US is expected to be light this week, the same cannot be said about China. Earlier today it was announced that the Chinese central bank would reduce the reserve requirement ratio for more rural commercial banks. This move was made with the hope of reviving a somewhat stagnant agricultural sector. While some smaller banks are able to hold less money, larger banks in larger cities are unaffected by the ruling. It is unlikely that this will be the only monetary stimulus measure employed by the Chinese central bank and for this reason we will continue to keep a close eye on the world’s second-largest economy and central bank.
Despite a peace deal of sorts being reached in Geneva over the weekend, armed militiamen continue to occupy buildings and towns across Ukraine’s eastern half. If their occupation is met with force by the Ukrainian military it is more than likely that safe-haven demand for gold and silver will be given an additional boost.
