November 19th Midweek Gold Market Update

As of the writing of this post, precious metals’ spot values are mostly holding steady and hanging on to the gains made on Tuesday. Like last week, this 5-day trading session has thus far been quiet and devoid of any noteworthy pieces of economic data. With that said, however, there are plenty of tidbits of information that investors have latched on to and picked apart, including comments made by the president of the European Central Bank.

The big data point of the day and week will come in a few hours in the form of the most recent minutes from the FOMC’s latest meeting. As has been the case for some time now, investors will be looking to today’s minutes as a place where they will hopefully derive more insight with regard to the timing of interest rate hikes in the United States.

As it stands, the seemingly inevitable raising of interest rates by the Federal Reserve is working to give the Dollar a bit of a boost while simultaneously limiting the buying interest associated with precious metals. Typically, gold and silver are seen as assets that protect an investor from uncertain, tumultuous economic times. Now, with the US economy on the up and up, the prospect of attaining gold and silver is simply not as attractive as it was when the US economy was struggling to gain some foothold. It will be interesting to see if today’s minutes offer any more insight regarding interest rates, but I have my doubts. The Fed has been vague about when they plan on hiking rates, so I do not think this time around will be any different.

European Central Bank Ponders Policy Moves

Despite the fact that this week has been insanely slow from economic and geopolitical standpoints, investors still have plenty to talk about because of comments made by ECB president Mario Draghi earlier in the week. Unless you have been completely out of touch in recent weeks and months, you are fully aware that the collective European Union economy is not faring so well. While the European Central Bank has made policy moves such as lowering interest rates and purchasing stocks, none of their moves thus far have really been much help. Now, the ECB seems to be pondering a new, more American way of combating stagnating economic conditions.

Earlier this week, ECB president Mario Draghi said that he and his colleagues have not discounted the possible buying of government bonds in an effort to stave off inflation and spur economic growth. For Americans, this tactic is known as quantitative easing and is credited as being a major part of the reason why we were able to leave our recession behind us much more readily than other struggling economies. It will be interesting to see what, if any, policy changes the ECB makes in the coming weeks/months.

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