Gold and silver are beginning the day on Wednesday posting mixed numbers. Through the first two days of this week, both gold and silver have been through quite a bit of price movement. On Monday, metals opened up the day on the up and up and ended the first day of the week having made some decent gains after late last week brought about some hefty losses. Yesterday, however, profit-taking, chart consolidation, and a few other factors saw gold and silver’s Monday gains mitigated significantly.
This week has already played host to a good bit of economic data, but is going to be even more noteworthy come the European Central Bank meeting tomorrow. In addition to this, the eyes of the market continue to be fixated upon the price movement of crude oil. Like gold and silver, oil made gains on Monday only to back down to fresh multi-year lows a day later. At present, the poor performance of crude oil has acted as a weight, dragging down all raw commodities.
Attention Turns to European Central Bank Meeting
The big news of this has been the upcoming European Central Bank meeting, which is scheduled to take place on Thursday. While every ECB meeting is hawked over by investors from all over the world, this week’s meeting is of particular importance due to an expected policy shift many people think the ECB will make.
As it stands, there exists a large number of investors who are convinced that the European Central Bank, at their meeting tomorrow, will announce the implementation of the purchase of government bonds as a means of stimulating the economy. This type of monetary policy is known as quantitative easing and was the very same initiative that played a vital role in allowing the US to emerge from a recession that began around 2008.
Investors are so convinced that the ECB will introduce QE on Thursday simply because of the commentary the market has been dealt over the past week or two. For instance, Mario Draghi, president of the ECB, was quoted as saying that QE measures are by no means out of the question. In addition to this, the OECD came out and saying that more government spending is the only thing that will help an EU economy that is said to be struggling so severely that it is harming overall global economic growth.
While there are bits and pieces of economic data from around the world being published this week, the main focus will continue to be tomorrow’s ECB meeting.