This week, also like the last few weeks, will see investors continue to focus on what is happening across Europe. Greece and their numerous creditors are still trying to hammer out the finer details of a bailout extension deal, but that situation has mostly faded from the headlines. Unfortunately for precious metals spot values, the fact that things have been so quiet have not been too beneficial.

Janet Yellen Addresses Congress

A few times every year, the chairperson of the Federal Reserve meets with members of Congress to basically give a rundown of how the US economy is doing and where it is headed in the near future. Today was the first of two days’ worth of testimony and as you could have probably guessed, investors were paying close attention.

In her remarks, Janet Yellen maintained that while the US economy continues to grow, interest rate hikes are not going to be implemented just for the sake of doing so. Instead, Yellen said that the prospect of interest rate hikes will be discussed and decided upon on a “meeting-to-meeting” basis throughout the course of this year. In all, Yellen’s remarks were not deemed as being overly hawkish nor overly dovish in their content. Because of this, the marketplace did not really react. Tomorrow sees Yellen confront a US House panel, and you can bet that investors will be paying attention. With that said, I do not expect that Yellen’s remarks tomorrow will differ greatly from what she had to say today.

In other news, this time from Europe, it is being reported that EU finance ministers and Greece government officials are apparently seeing eye-to-eye with regard to debt reduction measures and economic reforms needed to be enacted by Greece. As this situation continues to play out, we will keep a close eye on all developments across Greece and the rest of Europe. I have a feeling that Greece will be right back in the headlines before too long.

For the days that lie ahead, the week is expected to be fairly quiet and lacking as far as economic data is concerned. With that being said, however, the market will have a few issues unfolding across Europe to pay attention to as they stand the chance of pushing spot values in one direction or another. Today, the market is most closely following the progress of debt reduction and austerity talks taking place between Greece and the European Union.

Market Focuses on Greek Bailout Talks

Like was stated previously, the global marketplace this week is focusing on what is happening between the European Union and Greek officials. At present, early indications are that the talks are producing more of a stalemate than anything else. Greece wants to roll back some austerity measures while the EU, namely Germany, will not budge on this issue. Keep in mind, the agreement(s) that Greece are currently in violation of were reached more than 2 years ago, so it is kind of hard to believe that Greece’s new government has much of a chance of renegotiating these agreements.

If something isn’t done soon, many experts believe that Greece may soon be facing a credit crunch that may push it out of the European Union. Because of this, the market is pay extremely close attention because what happens to Greece will have a much larger impact on the wider European Union. One growing belief is that, if Greece exits the EU, other, smaller EU countries may be prompted to do the same.

Stocks Jump Forward, Regain Multi-Year Highs

Stock markets across the EU and the United States have done better over the last few weeks and are currently taking a lot of the attention away from precious metals. So long as this trend continues, I imagine that metals will suffer further blows and suffer weekly losses for yet another week. Also not helping metals’ fortunes is the fact that crude oil has recovered a bit in recent days and is now sitting well above $53/barrel. If you can remember, the average spot value of crude oil was under $50 only a few weeks ago.

As market conditions change, it is looking more and more like attention is being drug away from the precious metals market. Of course, investors are hoping this will change, but with such little economic data and activity, that is not looking likely. Making the global marketplace even slower is the fact that many Asian investors are prepping to celebrate the impending Lunar New Year.

US stocks as well as the US Dollar are doing better and this alone is putting pressure on gold and silver. Generally, however, the marketplace is a bit nervy, especially with regard to Greece and its economic and financial problems. Greece has been the focus of investors this week and it is likely that that will not change.

Market’s Attention Turns to Greece

Like was stated, the focus of the marketplace this week has remained on Greece’s new government and their refusal to abide by formerly agreed upon measures to reduce debt. Debt reduction in addition to austerity measures were laid forth by the EU as a prerequisite for additional financing provided by the EU.

Germany is not taking too kindly to Greece’s new government and is holding firm to the belief that Greece should honor previously agreed upon measures. Now, there is a growing belief that Greece may not remain part of the European Union for too much longer, and this is breeding some noticeable risk aversion this week. Unfortunately for precious metals, risk aversion is not outdoing the force of outside forces such as a stronger US Dollar and improving US stocks.

On top of all of this talk regarding Greece, another fear is that Greece’s potential exit from the EU might prompt other, smaller EU countries to do the same. This will add to the growing sense of uncertainty investors feel towards the European Union and its many economies.

Chinese Inflation Falls Dramatically

During the overnight hours, it was reported that Chinese inflation fell to a 5.5 year low during January. The reason for falling inflation in China is due to a weaker demand for and smaller supply of raw commodities such as crude oil.

In other news, China’s consumer price index was reported as up by almost a full percentage point during January. Finally, China also reportedly injected more liquidity into its financial system as part of yet another effort to give their economy a boost.
As this week plays out, I imagine that the market will continue to focus on smaller stories from the EU and other struggling economies.

In general, this week is not expected to bring about too much in the way of economic data, but that much was not really true today. The reason for that being that the US was dealt some quarterly earnings reports from the last quarter of 2014. As we look ahead to the next three days of the trading week, I expect that investors will continue to closely analyze whatever data is thrown their way.

Disappointing Earnings Reports Spark Stock Market Sell-Off

Today brought about a good deal of corporate earnings reports, and much to the surprise of everyone, most of them were on the downbeat side of things. Construction company Caterpillar declined throughout 2014’s fourth quarter and reported significantly smaller profits than were expected. With some mines operating at less than full-capacity, Caterpillar’s struggles were none too unusual.

Other big losers included tech giant Microsoft and Proctor & Gamble, who cited a stronger US Dollar as having hurt overseas profits. This is just a small cross-section of the reports dished out today, but it does a good job of painting the overall picture. The Dow is set for its biggest single-day loss since October. For precious metals, today has seen spot values more or less recover the value that was lost on Monday. Whether that will carry out as the week moves forward, however, remains to be seen. Generally, the market is a bit more bullish on metals now than they were a few months ago, so the hope is that gold and silver will bounce back from today’s poor day.

In other news, the marketplace has once again concerned itself with things that are going on in Greece. Seeing as the anti-austerity Syriza party won parliamentary elections by a wider margin than was expected, investors are curious as to how the EU’s financial struggles will play out. After all, Greece is due for another batch of stimulation funds by the time Summer rolls around, so it is best that the powers that be figure this out, to some extent, sooner rather than later.

This week, and for much of the past two weeks, investors are preoccupied with the upcoming European Central Bank meeting. With the ECB expected to make a major policy shift announcement at their meeting on Thursday, the market’s attention is firmly fixated on what the ECB might have to say. The Euro currency, which has been on a downward trend for the past few months, is continuing to suffer and is expected to lose even more value against the US Dollar. In addition to the ECB meeting, investors will also have plenty of economic data to focus on from the US and elsewhere around the world.

ECB Meeting Consumes Market Attention

For the past few weeks, investors of all types have been speculating with regard to what they think the outcome of this month’s ECB meeting will be. As the weeks passed, more and more investors became convinced that this would be the meeting where we see a major shift in monetary policy. Just last week, this belief grew even stronger once it was announced that the European Court of Justice deemed it legal for the ECB to explore experimental monetary policy practices.

Now, all eyes are on Thursday when the ECB will meet and subsequently make their post-meeting statement. An immediate effect of a shift in monetary policy will likely be a weaker Euro currency, but with the Euro being battered the last few weeks, one is left to wonder just how much further the currency can fall.

In addition to all of this, the market will still be paying attention to the price action of crude oil. Oil has done particularly poorly for the past few months, and this is now beginning to come to the aid of precious metals. How much further oil can fall will be a point of interest for investors as we head further into this New Year.

So far, this week has been relatively quiet from an economic data standpoint, but there was one important piece of data made public from the US a day ago. According to the report, home purchases on the part of younger Americans is on the rise and will continue to be so long as the US and global economies perform well. The report cited things like an improving jobs market as a major contributing factor behind the move to purchase a home as opposed to remaining a renter. With that said, however, there is no saying whether the global economy will continue to perform well, as some very real concerns have been raised recently.

Investor Concern Palpable During Early 2015 Trading

Though the previous section commented on how home purchases are growing as a direct result of a growing US economy, the global economy has become a concern for investors through the early parts of this New Year. Yesterday saw the price of oil dip below $50/barrel for a few moments, and this was enough to send the market into a bit of a panic. Shortly after oil dipped to that unforeseen low, stocks in the US and Europe began selling off at a rapid pace.

The same sell-off that took place on Monday has carried over into today as equities continue to trend downward. This downward trend is helping gold and silver simply because safe-haven demand has perked up (as it usually does when people grow wary of the economy).

As we advance through this week and into the next one, the attention of investors will gradually shift to upcoming meetings on the part of the FOMC and ECB. With it being widely expected that the European Central Bank will announce the institution of a large-scale quantitative easing program, it is no wonder that this meeting is of such importance. At this point, however, there is no concrete evidence pointing to such an announcement being made at January’s ECB meeting.

With so very little to talk about this week, our attention is naturally drawn to what the year ahead has in store. Though it is nearly impossible to say for sure what lies ahead, you can bet that many of the same factors that we have been focusing on in recent months will carry over into the new year. Things like the state of global equities, the future of interest rates in the United States, and the price action of crude oil.

Greek Elections Newest Source of Anxiety for Investors

One of the only and biggest news stories of the week came yesterday from the most unlikely of places. Greece, a country that is in shambles financially, is in the midst of trying to elect their next president. Just yesterday, however, it was reported that the Greek parliament shot down the Prime Ministers newest candidate for the position of president. Though this move was not necessarily unexpected, Greece’s parliament went on to call for a general election to be held sometime in early 2015.

Investors are becoming so worried about what is happening in Greece due to the simple fact that it is now widely believed that a candidate who opposes the current financial bailout program will be elected. This is a major cause for concern for many investors and is causing anxiety enough that gold and silver are posting modest gains. Of course, the reality of the matter is that the situation in Greece will more than likely only provide a temporary uplift for gold and silver. It is going to take a fundamental change in the current market atmosphere for gold and silver to make any gains worth talking about as well as making gains they can hold on to.

Looking Ahead to the New Year

As we look ahead to 2015, I can guarantee that one of the biggest topics of discussion will continue to be when interest rates in the United States will be raised. This topic has been in and out of the headlines for months now, but it is now approaching the time when many people are convinced interest rates will be raised.

In addition to interest rates, investors will also be wholly focused on the financial status of economies across Europe and Asia. These economies have been underperforming as of late and are needed to grow to pick up the overall strength of the global economy. All in all, it is plain to see that we have plenty of information for investors to focus on as we head into the new year.

Because this is a holiday week, you can expect that today, tomorrow, and Friday will be light days of trading simply because most people are getting an early start on their holiday vacations.

Russia Making Headlines…Again

For the better part of the last half year or so, the Russian government and economy have both been in and out of the headlines. Whether it be their military’s actions in Ukraine, the falling value of crude oil, or Western sanctions, there is always something to talk about concerning Russia.

This week, there was a report from Russia claiming that the Kremlin is continuously adding to their precious metals holding. According to the report, as of December 1st Russia eclipsed 38 million ounces in gold holdings. What’s more, the Kremlin is said to have been adding gold to its stockpile for the past 8 months consecutively.
In the words of many experts, Russia’s commitment to purchasing gold is said to be in an effort to fight off the declining value of the ruble. In case you were unaware, the ruble has been on an almost straight downward descent for the better part of this year. Now, Russia’s currency is worth less than half of what it was a year ago. As we head into the new year, it will be interesting to see what the Russian government does to combat their currently underperforming economy.

The spot values of gold and silver will be watched as we venture further into this holiday week, but in this bearish market, it is looking like the losses will continue to accumulate. Still, with that being said, current spot values are up off daily lows and slowly but surely improving. With some luck, gold and silver might just be able to finish today in the green.
As we look ahead to tomorrow, I imagine that things will remain quiet and subdued mostly because it is Christmas Eve and so many people are off work. Markets will still be open, but I do not anticipate that they will play host to a whole lot of activity.

In this void of economic data, investors the world over are focusing on the latest FOMC meeting, which kicked off this morning and is set to wrap up sometime tomorrow afternoon. With interest rate hikes continuing to dominate talks regarding the US economy, global investors will be paying close attention to this meeting for any further clues regarding rate hikes.

FOMC Closely-Eyed by Market

As is always the case, the market is paying close attention to this week’s Federal Open Market Committee meeting. With an interest rate hike announcement expected to be delivered in the wake of the meeting Wednesday afternoon, investors are gearing up to prepare for a drastically different market atmosphere. With that said, however, there is absolutely no way to ensure that the FOMC will be delivering a rate hike announcement upon the conclusion of their meeting tomorrow.

Regardless, precious metals investors will be paying close attention to the meeting simply because of the possible implication rate hikes might have for gold and silver spot values. You see, if interest rates are raised, investors will naturally become more interested in interest-bearing assets and, as such, will become less interested in the safe-haven qualities derived by precious metals. In addition to the negative implications rate hikes might have for gold and silver in the long-term, there are short term implications as well.

For one, there are a lot of investors who seem to be convinced that a rate hike announcement will immediately drive down the spot values of gold and silver . While this is a possibility, the reality is that gold and silver’s immediate reaction to a rate hike decision will more than likely not cause that much of a shockwave to spread across the global marketplace. This is so because the market has been expecting a rate hike announcement for some time now, so if it does actually happen, no one will be taken aback or in any amount of shock. Still, it will be interesting to see how the market will react to tomorrow’s FOMC post-meeting statement.

In case you missed it, last week brought about a November jobs report that showed a shocking level of job growth last month. Compared to expectations of more than 230,000 jobs to have been added to the US economy, the actual figures showed that more than 320,000 new jobs were created in November. This figure gave equities a major boost, but one that was only short-lived as the big sell-off in equity markets has taken place over the last few days. It will be interesting to see, over the next few days, if equities will continue to fare poorly or if they will rebound.

Crude Oil Continues Its Downward Trend

A major theme in the marketplace over the last few weeks has been the subdued nature of crude oil prices. Though customers at the pump may be excited to see the price of crude oil (gasoline) continuously falling, the wider precious metals investing community has seen nothing but negative outcomes to recently downward moving crude oil prices.

Though oil trending downward has hurt all raw commodities, it is thought to be something that will spur economic growth and consumer spending as we head into the holiday season. Because people are spending so much less money at the pump, they are thought to have more money to spend on friends and family throughout the holiday season. With some luck, experts are hoping that increased spending due to slacking crude oil prices will offset some of the more disappointing Black Friday numbers.

Weak Chinese, Japanese Economic Data Drives Equity Sell-Off

There is plenty of economic data on the slate for this week, but it is widely expected that very little of it will have any actual impact on global markets. Just yesterday, however, the market was dealt some economic data from China and Japan, and both countries’ reports were sub-par at best.

In China, it was reported that November imports and exports fell far short of expectations for the month of November. This news was not all that surprising, but did well to fuel a stock sell-off that continued into today. So long as global equities continue to suffer, a combination of bargain-hunting and safe-haven demand will more than likely drive gold and silver prices forward.
With that said, however, the fact that crude oil continues to trend downward will continue to weigh on the spot values of both gold and silver. Unless global economic conditions change dramatically sometime soon, there will be a number of factors constantly working to bring spot values downward.