March 19th Midweek Gold Market Update

After spending a majority of last week reeling in gains, spot gold and silver have done nothing but lose value during the first three days of this week. With tensions calming down in Crimea and the FOMC likely to announce another round of tapering, precious metals are simply not receiving much of any good news from anywhere.

Worries with regard to the Chinese economy and financial system are still being tossed around the marketplace, but today have had little effect on the upward trend of US equities. The investing world is anxiously awaiting Janet Yellen’s first post-FOMC meeting press conference, though it is not expected that she will deliver any groundbreaking news.

FOMC Meeting Steals The Spotlight

This week’s FOMC meeting was met, as it usually is, with a fair deal of speculation regarding what decisions, if any, the Fed was going to make in light of recent US and Chinese economic data. Though most people agree that the outcome of today’s meeting will see Quantitative Easing tapered by another $10 billion, others are not so sure that this will be the case. US economic data has been sub-par recently, one of the many factors prompting some market analysts to believe the Fed is pulling away easy money at too fast of a pace.

Janet Yellen’s first press conference as Chair of the Fed is another reason investors are going to be tuning in for the conclusion of the FOMC meeting. Because she is still new to the position, investors and market analysts are jumping at any opportunity to hear her insights and thoughts with regard to the economy and monetary policy.

As it stands, it is not looking like spot gold or silver stand to benefit an any significant capacity as a result of today’s Federal Reserve activity. If anything, the outcome of the FOMC meeting and subsequent press conference by Janet Yellen may end up working against precious metals.

Financial Worries In China Unnerve Investors

Last week yielded some shocking news from China in the form of its first corporation in history going into default on bond payments. Today, last week’s report is being complemented by a rumor that yet another Chinese corporation went into default on bond payments. While this second report has not yet been confirmed, it is definitely adding to the sense of uneasiness investors are feeling towards the Chinese economy as of late.

Finally, it is now somewhat official that Russia has annexed the Crimea region of Ukraine. While this annexation has not been met with the violence many expected to see, it is still a tense situation nonetheless. The EU and US have threatened to impose sanctions on Russia and specific Russian citizens, though these have not really been taken seriously by anyone involved.

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