Gold and silver have done little moving in the early parts of Wednesday, though the moving they have done thus far has been negative. There are some US economic reports due out today, though they have not done too much in the way of altering precious metals’ spot values. An incident between the US and China in the East China Sea has prompted some mild safe-haven demand for gold and silver, though we must reiterate the minor nature of the incident and subsequent safe-haven demand increase.

Many American investors are out of the office today as they prepare to celebrate the Thanksgiving holiday tomorrow.

Economic Data, East China Sea Dispute

In viewing the healthy offering of US economic data today, it was clear that the reports were not overly positive nor overly negative. In the end, however, the value of the US Dollar improved a bit in the wake of today’s economic data. The minor movement posted by metals and the Dollar can mostly be attributed to a quieter marketplace as a whole today. With today being one of the biggest travel days of the year in the US, it is no surprise that trading was at a minimum.

In other news, a disputed grouping of islands in the East China Sea became the center of more controversy today after it was reported that US military aircraft flew over them. Though these islands are uninhabited, their ownership is a topic of major controversy. In recent months, both China and Japan have come out saying these islands are theirs and neither one is willing to entertain any type of discussion about ownership. Because this is such a touchy topic for both the Chinese and Japanese governments, the US flying planes over the islands did not make the situation any better. Instead, many experts are viewing this move as provocative in nature and are eagerly awaiting China’s response on the matter.

Though this incident will probably blow over and be forgotten about in a week’s time, it was still newsworthy enough to prompt a marginal increase in safe-haven demand for precious metals. For many, however, this is just another instance where the US military is sticking its nose in a situation it does not belong in and is more annoying than anything else.

Gold and silver have continued along their extended declines in the early parts of Wednesday as the whole of the investing world is awaiting the release of the FOMC’s minutes today. With the president of the St. Louis Federal Reserve scheduled to speak and the FOMC minutes due out, today is shaping up to be a busy one for precious metals.

Though it is likely that QE will be retained for the remainder of 2013 and the first parts of 2014, there is no saying what will come out of the next couple of hours.

FOMC Minutes

Anytime the Federal Open Market Committee so much as changes rooms the investing world is paying extremely close attention. Of course this is an exaggeration, but it must be said that the world marketplace has taken a particularly keen interest in regards to what the future holds for monetary policy in the United States. With a lack of any other major news stories, investors are keeping themselves occupied by latching on to every last word written or spoken by members of the Fed.

Today is an investor’s dream come true simply because there is so much Fed activity taking place. In addition to the FOMC minutes due out later this afternoon, investors are also going to be paying particularly close attention to what the president of the St. Louis Fed bank, James Bullard, has to say in a speech he is scheduled to deliver sometime later today. Seeing as Mr. Bullard has long been a supporter of QE and keeping QE around, it will come as no surprise if his speech centers solely on reasons why the US economy still needs Quantitative Easing.

The FOMC minutes will be analyzed just as closely as Mr. Bullard’s speech in hopes of uncovering any clues regarding the fate of QE. Should the minutes say something decisive about QE’s future (something that will almost never happen), gold and silver can be expected to take a dramatic shift in one direction or another. Instead, a more likely result from the FOMC minutes is a group consensus that QE’s future is not yet able to be decided upon. This type of news will probably be perceived as meaning that QE will be retained until sometime next year, something that will almost undoubtedly give precious metals spot values the boost they have been needing over the past 2 weeks or so.

Gold and silver have continued last week’s declines amid a much quieter trading atmosphere this week. While the end of last week saw a somewhat shocking announcement made by the ECB, the former portion of the week was full of surprising economic data out of the United States.

Now there is a growing belief that QE, the United States’ monetary policy, will be tapered before the year’s end. Of course this is mere speculation at this point, though the recent run of positive form by the US economy is helping boost that speculation.

US Economic Data and What it Means for Gold and Silver

In the early parts of last week, while investors were speculating about the outcome of the upcoming ECB meeting, the US’ 3rd-quarter GDP report was released. Though it was expected that GDP, for the third-quarter, was expected to rise by about 2%, actual figures showed annualized GDP shooting up by almost 3%. This news helped boost both US stocks and the US Dollar while simultaneously putting hefty downward pressure on gold and silver.

The GDP report was not the only economic data released last week either, as October’s employment report was also catching the attention of investors. It was expected that non-farm payrolls in the US would rise by about 120,000, though actual figures came in above 200,000. This news, like the GDP report, gave the US Dollar even more strength. With the US Dollar sitting at multi-month highs right now, it is unlikely that gold and silver will have any real room to make positive gains this week.

Furthermore, investors in both the United States and abroad are growing in confidence with regard to the tapering of Quantitative Easing. The once widely held, and then subsequently abandoned belief that QE would be tapered before the year’s end is once again making a comeback. With members of the Fed calling for more consistent economic data out of the world’s top economy before they entertain the tapering of QE, last week’s news was just what the doctor prescribed. Now it becomes a waiting game in order to see if the Fed will, in fact, make any sort of reduction to QE. At this point, those who are confident that the monetary policy will be wound down are pointing towards the December FOMC meeting as a likely time where we will hear of tapering.

Gold and silver have made some small gains after consistent losses have marred their past 3 or 4 days. The European Central Bank is scheduled to have their meeting this Thursday, a meeting which is expected to yield a change to monetary policy across the region.

In other news, the steadily declining euro currency has paved a clear path for the US Dollar to make decent gains. Most of these stories and bits of data translate and have been translating into heavy downward pressure being placed on precious metals.

The European Central Bank Meeting

The European Central Bank’s monthly policy meeting is a lot like the FOMC meeting we just witnessed in the United States. Because of that, investors will monitor Thursday’s meeting with intense scrutiny in hopes of hearing about possible changes to current monetary policies.

As of now, the overriding belief is that the ECB’s key interest rate will be slashed. This belief stems from a series of economic reports released recently which highlight a very slow economy as well as all-time low inflation rates. With economies other than that of Germany’s performing poorly across Europe, many feel as though there has never been a better time for the ECB to take some action. The increasingly accepted notion that there will be at least some sort of change to monetary policy in Europe as a result of this meeting has prompted European stocks to make impressive gains while the euro currency is rapidly declining in value.

The euro’s decline has made it possible for the USD to post substantial gains, something that has not helped the spot values of gold and silver. Additionally, recent US economic reports have mostly been better than expected, which is even worse for precious metals because it will bolster the belief that US monetary policy could be changed before the year’s end. Nonetheless, gold and silver were able to make some small gains on Wednesday thanks to an increased amount of bargain-hunting buying.

Chinese Communist Party Meeting

Another meeting stealing headlines this week is the Chinese Communist Party meeting. This is a meeting held so that top Chinese officials can come together and lay out their plans in regards to improving their country.

According to Bloomberg.com, this meeting will be centered around making massive reforms because the country is on course to produce its slowest economic growth in more than 20 years. The meeting will be held beginning on Saturday the 9th and concluding on Tuesday the 12th.

Both gold and silver haven’t moved drastically far from where the opened this week. The main topic of discussion through the first half of the week was the latest FOMC meeting, which began early Tuesday and ended this afternoon. Though the meeting emitted 0 major policy changes, the Fed’s statements and sentiments were what investors were really trying to assess today.

US economic data continues to be released on an almost daily basis, with Wednesday yielding the latest employment reading for October. European economic data released this week has been positive for the most part, though no one is paying it too much attention as a majority of investors were solely concentrating on the FOMC meeting.

FOMC Meeting and Its Outcomes

Prior to this week’s FOMC meeting, there were not many people expecting to hear of a major shift in monetary policy. Quantitative Easing, the Federal Reserve’s monthly bond-buying program, has been around for a while now, and due to the current state of the US economy most investors agreed that it would be retained, at least until sometime next year. Popular belief was proved to be accurate, as the conclusion of the FOMC’s meeting yielded no changes to QE.

While the fact that QE remains put is an underlying bullish factor for precious metals, the Fed’s statement, which was released after their meeting concluded, proved to be mildly bearish for gold and silver. What the Fed has to say was that while the US economy is not strong enough to taper QE, it is much stronger than it was only a few months ago.

With the Fed retaining their stance in regards to QE, investors and market experts alike are left to ponder and speculate when we will finally see some sort of change to monetary policy. Currently, many are under the impression that we will not see a change to QE be made until well into the 2014 calendar year. Some think that the end of the first quarter will be prime time for QE to be tapered, while others do not see tapering happening until after 2014’s midway point. Regardless of what investors think, anything coming out of their mouths is purely speculation at this point.

US Economic Data

Apart from the FOMC meeting, October’s employment report was also catching investor attention on Wednesday. Expectations were that non-farm payrolls increased by about 150,000 during October, though actual figures came in more in the ballpark of a 130,000 payroll increase. This 20,000 margin was good for precious metals, though in the grand scheme of things, today’s economic data had little impact on the commodities market.

What the weaker than expected employment report did do however, is help aid the US Dollar’s extended decline.

Gold and silver have calmed down a bit on Wednesday after opening the week in impressive fashion. Now that the US government shutdown is behind us, investors are finally beginning to shift their attention to other matters, such as the shutdown’s possible long-term impact on US economic growth.

Not only that, but a growing situation in China is beginning to catch the world’s attention. As the week approaches its later stages, investors will be paying close attention to whether gold and silver can maintain their recent upward trend or if they will slip back into a decline.

Chinese Interest Rate Worries

Short-term interest rates in China are reportedly on the rise as of late and is cause for concern for investors in Europe and Asia. It is thought that if interest rates continue to rise, Chinese monetary officials are going to need to consider tightening their current policies. Of course, if monetary policies are tightened, it will likely increase overall demand from China for precious metals. Seeing as China is the second largest economy in the world, any decrease in their appetite for gold and silver will be something for investors to pay attention to.

Interest rates are one point of interest from China as of late, though a rise in the average price of houses is yet another reason to watch the Chinese economy.

Delayed Economic Reports Making An Impact

Because of the US government shutdown, a slew of economic reports were put on hold. Now, with the shutdown in the rear-view mirror, many of these delayed reports are surfacing. The first, and arguably most important of these reports was the delayed jobs report from this past September. The market was prepared to see a rise in the number of non-farm payrolls of almost 200,000, but such wasn’t the case. The actual figures showed that September non-farm payrolls rose by only about 148,000. Despite the fact that the figures came in weaker than expected, the overall unemployment rate managed to fall by one tenth of a percentage point to 7.2%.

In spite of the fact that a falling unemployment rate is often indicative of an improving economy, stocks and the USD declined in value almost immediately after the weaker jobs report was released. There are more economic reports due out in the coming days and weeks, though it is believed that quite a few of the delayed reports will be foregone completely in lieu of more updated reports from October.

Nonetheless, the next few months are beginning to look more and more like they will be beneficial to the growth of gold and silver spot values. The short-term is always a big question mark, but with recent events unfolding as they have and are, investors are growing in confidence in regards to precious metals.

Gold and silver rebounded a bit on Wednesday after a two-week long slide. During that two week slide, the US government was partially shutdown, leaving over 800,000 government employees without jobs. The shutdown caused most markets to decline, and though a government shutdown seems like the type of situation which would cause an increase in safe-haven demand for precious metals, the opposite was actually true. The reason for this can be directly attributed to the fact that the general American and worldwide public was well aware of the possibility of a shutdown for over a year. The general awareness that a shutdown was possible meant that when the shutdown went into effect it did not create the shock amongst investors that it would have if people had no idea a shutdown was possible.

Even though it took over two weeks, the shutdown seems to be finally coming to an end. Congressional leaders on both the Democratic and Republican sides came together and formed a budget and have raised the debt ceiling just before the US was set to default on its loan obligations.

What Does All This Mean Going Forward?

With all this talk of government shutdowns, debt ceilings, and what Congress is doing or isn’t doing, you may be confused in regards to what all this means for the spot values of gold and silver. Today, Congress reaching an agreement on a budget and raising the debt ceiling was well-received by most markets and translated into positive gains across the board.

While today was positive for gold and silver spot values, neither metal is even close to recovering the losses posted over the 2+ week government shutdown. We will have to monitor how investors react tomorrow and the next few days to really see what direction metals will head in. Many believe that there will be a price correction and that spot values will return to what they were before the 1st of October, though today’s gains were so small that you cannot really use them to forecast a large pullback in regards to the spot values of gold and/or silver.

Gold and silver have been gaining value this week, and despite things slowing down a bit on Wednesday, this week is looking like its gonna be another positive one for precious metals. There is a high probability that we will see an increase in violence in the Middle East, a region that clearly needs anything besides an increase in violence.

We have been continuing to monitor the looming currency crisis in Asia and though things have slowed down, the Indian Rupee and many other currencies are at risk of depreciating.

Violence in Syria to Possibly Escalate

Earlier this year, it was brought to the attention of the world that the Syrian regime was accused of using chemical weapons against its own citizens. While this news did shock the world, no country or group took any action against Syria apart from condemning their actions publicly.

Recently there has been some talk about the US armed forces taking action in Syria in response to what they view as an injustice of a government against its people. Though the Syrian civil war has been going on for more than two years now, it is a more recent attack that has caused the American government to flirt with the idea of using military force against the Syrian government.

Though it may seem like this news has little to do with precious metals, especially seeing as the Middle East is constantly the victim of ongoing violence, it has caused the world marketplace to look for more safe assets to invest in. Because of this, stock markets in both the US and Europe have fallen victim to heavy selling pressure while crude oil prices have shot up.

Crude oil’s spike in price makes sense due to a fear that shipments may be disrupted should more violence break out in Syria. Another fear stemming from the possible US invasion of Syria is that no one is sure of how the Syrian government will respond to an American attack. Some people think that Syria will lash out on Israel as a result, while others feel like Iran may step in and defend Syria. Regardless of what many people think or believe will happen as a result of a US invasion of Syria, none of the proposed scenarios seem to have positive results.

While no one wishes more violence upon the war-ravaged Middle East, the possibility of US intervention in Syria has really caused safe-haven demand for gold and silver to spike. Investors will be paying close attention to news outlets as they will have up to the minute reports on everything going on in Syria.

So far this week gold and silver have experienced a mixed bag of results, making gains one day and losses another. Luckily, however, both the gains and losses have more or less offset each other and by midday on Wednesday both metals were sitting in essentially the same position as they were when the week opened up.

Even though we are in the latter stages of August, a time of year where the world trading atmosphere is mostly subdued due to people taking vacations, there have been plenty of news stories to talk about. This week a few stories that we have touched on include the continued violence in Egypt, rapidly depreciating Asian currencies, and the Federal Open Market Committee’s upcoming meeting’s minutes. To give you the short, almost all of these stories have boosted safe-haven demand for both gold and silver.

Depreciating Asian Currencies

Higher interest rates are beginning to once again become a mainstay in many of the world’s most prominent economies. This is a natural economic occurrence, though these rising interest rates are working to put immense selling pressure on many of the world’s mid-level currencies, especially those in Asia. Hardest hit, perhaps, were both the Indian Rupee and the Indonesian Rupiah. Both of these currencies began declining rapidly early last week and have since never looked back. The selling pressure is mounting and even though both Indian and Indonesian governments are working to alleviate the downward pressure, nothing has worked up to this point.

The fear which is plaguing the marketplace is that once these currencies fall even further they will take other mid-level currencies with them. At this point all we can do is sit back and watch this situation unfold, though precious metals investors are hoping things stay on this course as safe-haven demand for gold and silver is beginning to surge.

FOMC Minutes

The US Federal Reserve seems to be in the news almost weekly, and as such, this week is no different. This time around the Fed is in the news due to the upcoming release of the FOMC’s minutes for their September meeting. These minutes will be released and digested later in the day, though the speculation has already begun.

What investors are hoping for is some news in regards to the future of monetary policy, though this news is not a guarantee. While many contradicting thoughts about what Quantitative Easing’s future will be in the United States have been circulating, the Fed has done more to confuse investors than it has to answer or address their many questions and concerns.

The hope is that these minutes will be different than the usual, though in my personal opinion I would not expect to hear any earth-shattering news upon the release of the minutes. This, however, is just my opinion as I have been wrong more than once in my life.

Gold has had a bit of a mixed week thus far, after making solid gains on Monday and then subsequently posting losses on Tuesday. Silver, on the other hand, has made solid gains this whole week. Both metals, during the morning hours of Wednesday have been on yet another solid upswing which has seen gold gain over 10 dollars while silver has thus far gained closer to 30 cents.

It will be interesting to see if both metals can sustain and possibly even build upon these gains as the day plays out, though with the economic data which was released out of the United States, gains seem likely.

US Producer Price Index Report Weaker Than Anticipated

A few things investors were looking out for on Wednesday was the latest producer price index report, coupled with a speech that will be held later today by the president of the St. Louis Federal Reserve bank, a certain Mr. Bullard.

It was reported by the US Labor Department at 11AM on Wednesday that wholesale prices did not change from June to July. This data was a bit disappointing to hear, though it was not expected that major increases were going to be seen as the same wholesale prices rose by nearly 1% from May to June of this year.

The Core PPI, which excludes energy and food prices, rose by only .1% from June to July. This was a smaller gain than the expected .2% increase.

Towards the end of the day on Wednesday, a speech made by James Bullard will catch the attention of investors everywhere. Even though it is not explicitly clear what the president of the St. Louis Federal Reserve bank will discuss in his speech, most people are guessing that his talking points will likely at least touch on Quantitative Easing and its fate going forward.

Yesterday saw Dennis Lockhart, president of the Atlanta Federal Reserve bank, make a statement saying that the inconsistency of recent economic data out of the US is the major reason behind why the Fed is unable to make a decisive decision regarding what to do with Quantitative Easing as we move into 2014. If Bullard doesn’t make any surprising comments today, investors are going to be shifting their attention to next month’s Federal Open Market Committee meeting as a source for more information on the future of QE and whether or not it will be tapered or even ended before we move onto next year.

The weaker than expected data regarding the PPI in the US is the major reason behind why gold and silver have made gains in the early parts of Wednesday.

Europe Waves Goodbye to the Days of Recession

The last week or so of worldwide economic news has been highlighted by a large amount of positive economic readings emerging from the European Union. Contrary to the previous 6 months, where we were subjected to nothing but negative economic readings from Europe, the last week has featured positive pieces of data stemming from all realms of the EU economy.

On Wednesday, it was reported that GDP from the first quarter to the second quarter of 2013 for the EU had risen by about .3%. Unfortunately, GDP for this year’s second quarter was almost a whole percentage point worse than it was only a year ago.

Also happening on Wednesday was a German government 10-year bond auction. This particular auction saw positive yields of about 1.80%; the largest yields in a German bond auction for well over a year. Most of this data has helped grow the confidence of those who are of the school of thought that the European economy is speeding along the road to economic recovery.

This whole week has also been highlighted by an increase in the demand for physical gold and silver as reported by brick and mortar dealers and online dealers of precious metals alike. If the last two days of this week at all resemble the last two days of the previous week, precious metals investors will be more than satisfied with the gains both gold and silver were able to make.