December 17th Midweek Gold Market Update

Gold and silver spot values, as surprising as it may seem, are adding a little bit of value ahead of what is shaping up to be the most important day of the week. With the latest FOMC policy meeting wrapping up this afternoon, and it widely being expected that a major announcement will be made, you can bet that the market is wholly preoccupied with speculation regarding the future of interest rates in the US. To be fair, it is no wonder the market is so heavily preoccupied with what the FOMC is going to potentially say, because there really isn’t much economic data to speak of this week.

Other than the FOMC meeting, the market has concerned itself with the falling values of crude oil and the Russian ruble. The two assets have been losing value for quite some time not, but they have made their way into the spotlight this week due to some investor concerns.

All in all, this week has been devoid of any major economic data, but with a few geopolitical concerns and all eyes on the FOMC, there has been plenty for us to concern ourselves with.

Russia’s Failing Economy a Growing Concern

For much of the past 12 months, the Russian economy has been underperforming and the Russian ruble has been losing loads of value. A combination of Western economic sanctions and the falling value of crude oil have done little to aid the large economy either. Now, with ruble essentially in free-fall over the course of the past few days, the attention of investors has once again been called to focus on Russia.

This is so because there is a growing fear that a frustrated Vladimir Putin may lash out on Western nations militarily. He has recently been seen flexing his military muscle in all areas of the country, and though no one in the US or EU governments seems overly concerned, investors are wondering what Russia will do to combat their failing economic system.

FOMC Meeting Also Catching the Attention of Market

As is the case every time the FOMC meets, investors perk up and pay close attention. This time is no different, especially because investors are expecting to hear a major monetary policy announcement. Of course, as you could have probably guessed, the market is concerned with the future of interest rates in the United States as they have been a subject of concern for quite some time.

At this juncture, the market is quite honestly expecting the FOMC to make some sort of concrete announcement regarding when interest rates will be raised and by how much they will be raised by. Though we have heard this before, many a time before, in fact, investors seem convinced that today is the day that some more information regarding interest rates will be divulged.

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