Gold and silver spot values are moving sharply lower on Wednesday upon hearing the results of Tuesday’s midterm elections. Though there is still plenty of information for investors to mull over in the forthcoming days, yesterday’s elections were vitally important for a number of reasons.
As we look ahead to the last two days of the week, investors will be anxiously awaiting tomorrow’s European Central Bank meeting as well as Friday’s US employment data from October. Though there is little evidence out there able to confirm it, many investors are convinced that the ECB will be announcing fresh monetary stimulus measures at the conclusion of their meeting tomorrow. If this happens, and Friday’s employment data is better than expected, precious metals may feel even more selling pressure as we head into the weekend and next week. As such, the last few days of this week will be incredibly important for investors of all types.
Election Results Give Equities a Boost
Yesterday’s midterm elections went the way of the Republican party, and this has translated into equity markets in the US being given considerable boosts. The US Dollar was also given a significant boost as a result of yesterday’s election results. The reason for this is due to the fact that many people believe the Republicans, who now control both the House and the Senate, will be better for economic growth and for business than the Democrats were.
The fact that both the Dollar and equities are doing well today only worked to further pressure gold and silver. Now, spot gold is hovering near a 4.5 year low while silver is nearing 4 year lows of its own. Unfortunately, it is looking like the rest of the week will do gold and silver no favors. What data is expected to be released will more than likely only work against metals. With that said, stranger things have happened in the past.
Crude oil is also continuing to trend downward, and this has been yet another factor that has had a negative impact on the value of all raw commodities–including gold and silver. With the US Dollar and Crude Oil heading in inverse directions, the market is only growing increasingly bearish.