Gold and silver are trading down for a second consecutive day this week, fueled by a more risk-on appetite exhibited by investors. Yesterday saw precious metals spot values trade down significantly after events over the weekend saw precious metals bears seize control of the market. Not helping the fortunes of precious metals at all is the fact that recent US economic data has been upbeat, thus driving up the value of the US Dollar.
Risk-On Attitude Putting A Dent In Demand For Precious Metals
In recent weeks, stock indexes from around the world have been on the rise, hitting multi-month or multi-year highs along the way. What’s more, the crisis in Ukraine is slowly but surely becoming more of a regional issue as opposed to a powder-keg the world is watching with bated breath. Over the weekend, Ukrainian voters took to the polls in order to vote for their first official president since Yanukovich was ousted a few months back.
With all this in mind, there are a number of investors who are growing increasingly convinced that the US economy is not growing at the rate many had anticipated it would. Because of this, many investors and market experts alike are calling into question the rate at which the Federal Reserve is tapering bond-buying, also referred to as Quantitative Easing. While the Fed has yet to allude that they might ease up on their tapering, some feel as though an easing in tapering is inevitable. As it stands, apprehensions with regard to the rate at which the US economy is growing are still an underlying bullish factor for metals, but are currently not doing anything to help precious metals.
Precious metals spot values are continuing to fall, but have stopped declining at such a rapid rate. At this point, gold is just about $50 above $1,200/ounce while silver is rapidly approaching an even $19/ounce. If things don’t turn around for metals in a hurry I fear that spot values will peg lower for the foreseeable future.