Both gold and silver haven’t moved drastically far from where the opened this week. The main topic of discussion through the first half of the week was the latest FOMC meeting, which began early Tuesday and ended this afternoon. Though the meeting emitted 0 major policy changes, the Fed’s statements and sentiments were what investors were really trying to assess today.
US economic data continues to be released on an almost daily basis, with Wednesday yielding the latest employment reading for October. European economic data released this week has been positive for the most part, though no one is paying it too much attention as a majority of investors were solely concentrating on the FOMC meeting.
FOMC Meeting and Its Outcomes
Prior to this week’s FOMC meeting, there were not many people expecting to hear of a major shift in monetary policy. Quantitative Easing, the Federal Reserve’s monthly bond-buying program, has been around for a while now, and due to the current state of the US economy most investors agreed that it would be retained, at least until sometime next year. Popular belief was proved to be accurate, as the conclusion of the FOMC’s meeting yielded no changes to QE.
While the fact that QE remains put is an underlying bullish factor for precious metals, the Fed’s statement, which was released after their meeting concluded, proved to be mildly bearish for gold and silver. What the Fed has to say was that while the US economy is not strong enough to taper QE, it is much stronger than it was only a few months ago.
With the Fed retaining their stance in regards to QE, investors and market experts alike are left to ponder and speculate when we will finally see some sort of change to monetary policy. Currently, many are under the impression that we will not see a change to QE be made until well into the 2014 calendar year. Some think that the end of the first quarter will be prime time for QE to be tapered, while others do not see tapering happening until after 2014’s midway point. Regardless of what investors think, anything coming out of their mouths is purely speculation at this point.
US Economic Data
Apart from the FOMC meeting, October’s employment report was also catching investor attention on Wednesday. Expectations were that non-farm payrolls increased by about 150,000 during October, though actual figures came in more in the ballpark of a 130,000 payroll increase. This 20,000 margin was good for precious metals, though in the grand scheme of things, today’s economic data had little impact on the commodities market.
What the weaker than expected employment report did do however, is help aid the US Dollar’s extended decline.