After hitting a 4+ month high in the early morning hours, gold took a downward turn not too long after markets had opened in the US. The downturn in the spot value of gold and silver is being largely attributed to profit-taking in the wake of what has been a stellar run by precious metals. Civil unrest around the world is continuing to keep safe-haven demand on the up and up, though there is no saying how long safe-haven demand alone will be able to keep gold and silver above key resistance levels.

A strong batch of US economic data released today also likely put downward pressure on metals. As of late, however, most pieces of US economic data have been far from upbeat.

Mixed-Bag of Factors Pushing Metals In All Directions

Over the last week or so, precious metals investors have seen a number of new factors enter the marketplace, all of which standing the chance to move the spot values of gold and/or silver. For one, the civil unrest still raging in Ukraine has helped fuel safe-haven demand for metals, which is at its highest point in months. While Ukrainians have been vehemently protesting their now ex-president’s decision to cut ties with the EU in exchange for a hefty financial bailout from Russia for months now, the protests only began turning extremely violent early last week. Since then, the death toll has exceeded 100 and is still climbing. Though ex-president Yanukovych is now fleeing authorities, the situation in Ukraine is far from solved. As the unrest carries on, investors can expect that safe-haven demand for gold and silver will too. Ukraine is not the only part of the world seeing civil unrest either, as Thailand is experiencing much of the same. Though the violence in Thailand has been less severe than in Ukraine, there remains a constant threat that things can boil over at any minute.

In other news from around the world, an economic report out of the US with regard to housing sales has caused risk-aversion by investors to be put to a halt, at least for now. The report stated that new home sales rose at their fastest pace in more than 5 years. Rising by nearly 10% an annual basis, new home sales in the US grew by a significant margin that handily beat the expectations of the market. Naturally, upbeat US economy data such as this report worked against the prospects of gold and silver, pushing both metals downward for almost the whole day on Wednesday.

Despite today’s losses by metals, both gold and silver are still in a decent position, with gold well over the crucial $1,300 threshold and silver hovering in between $21 and $22/ounce. As we head further into 2014, it will be interesting to see if gold and silver can hang on to gains made over the past few weeks or if profit-taking and other factors will drive the values down once more.

For the second consecutive day, gold and silver spot values are declining slightly as a result of a slight technical correction and some mild profit-taking. After gold hit a 3 and a half month high on Tuesday, and has been trending upwards for the past week, it was only a matter of time before profit-taking and/or technical corrections made an appearance.

Today’s big news revolves around the release of the latest FOMC minutes. Due to recently poor economic data from the United States, investors from around the globe will be paying attention to today’s minutes in hopes of hearing any news with regard to future plans to continue tapering.

Gold, Silver Hanging On To Momentum

Thanks to a lack of fundamental inputs this week, investors and market analysts are seeing very clearly that precious metals bulls have the near-term momentum. Though profit-taking is making an appearance as of the last few days, the marginal impact it is having on precious metals spot values is telling of the strength and positive outlook developing towards commodities, specifically gold and silver.

The only real input worth talking about this week is today’s FOMC minutes. Though it is unlikely, investors are hoping to hear more information about the FOMC’s future plans to taper. Instead, the minutes will likely see the FOMC reiterate their positive outlook on the US economy.

In other news from around the world, violence between protesters and riot police in Ukraine is beginning to escalate. Political tensions have been an ongoing problem in the large European nation since last November when Viktor Yanukovych made the move to cut ties with the EU in exchange for a $15 billion economic bailout from Russia. Recently, however, violence and protests have begun to worsen and threaten the overall stability of the nation. This situation, as it grows more dire, will likely end up translating into yet another bullish factor driving safe-haven demand for gold and silver.

For the first time in a long time, precious metals have the near-term momentum and are growing stronger with each passing day.

Gold and silver are posting modest gains for a third consecutive day, even in light of an increase in risk-appetite. Due to a lack of fresh US economic data, the marketplace is still digesting Janet Yellen’s first address to Congress as head of the Federal Reserve which took place a day ago. Though Yellen did not offer much in the way of insight as to the Fed’s future monetary policy decisions, her remarks made it clear that she is none too different than her predecessor, Ben Bernanke. Something that did help gold, however, was the fact that both Yellen and St. Louis Federal Reserve president James Bullard made it clear that the Fed is in no rush to take QE away entirely.

This week is already shaping up to be a quiet one as far as economic data is concerned, the only real report to talk about will be Thursday’s weekly jobless claims report, though this is not likely to have any big impact on precious metals spot values.

Safe-Haven Demand Given New Life

In light of a few recent factors, the demand for gold and silver has been on a consistent climb. For one, fears over the strength of emerging market currencies have caused thousands of investors to rethink putting their faith in assets like the Turkish lira and the Indian rupee. Though these currencies have since balanced themselves, investors remain wary.

Another factor currently aiding precious metals is a rough patch of both US and Chinese economic data. Over the course of the past month or so, the market has been greeted with few positive pieces of economic data from the world’s top 2 economies. In the US, monthly employment reports have disappointed for two consecutive months, while in China manufacturing data has been weaker than what we have grown accustomed to. Poor Chinese economic performance is hurting the industrial demand for gold and silver, though much of that vacant demand is being filled up by safe-haven investments. On the other hand, poor economic performance in the US is almost always going to be good for precious metals. Rapidly declining stocks as well as a pressured USD are making the outlook on gold and silver seem increasingly upbeat.

As it stands, gold is trading near a 3-month high and is continually inching closer to the $1,300 threshold.

Gold is up sharply in the early morning hours of Wednesday while silver too is posting gains. Safe-haven demand for precious metals has seen a visible boost over the last few days, something that can be directly linked to the very real possibility that the Fed will make another tapering announcement later this afternoon. Emerging currencies have been under a lot of pressure this week and in order to ease the nerves of the marketplace both the Turkish and Indian central banks raised their key interest rates.

Investors will continue to hold steady as they await the conclusion of today’s FOMC policy meeting.

Periphery Currencies Striving for Balance

So far this week has been a fairly interesting one, with gold hitting 9-month highs on Monday while periphery currencies and world equities suffered. Things more or less corrected themselves on Tuesday, but the pressure on emerging market currencies is still hanging around. After Monday’s large sell off of the Turkish lira and the Indian rupee, both countries’ central banks convened for emergency policy meetings.

In the early morning hours of today it was announced that both central banks decided to raise their key interest rates. Turkish officials made a severe change to the nation’s lending rate, pushing it up by a staggering 12%. Indian officials also raised their key lending rate, but not by the margins seen in Turkey. Both of these moves were made in an effort to fight off rising inflation. For the moment, it seems as though the raising of lending rates has eased the somewhat tense emerging markets, but with the FOMC meeting concluding this afternoon that all could change in the blink of an eye.

Equities Continuing to Feel Pressure

Emerging market currencies are not the only ones feeling pressure as of late seen in the recently large sell off of equities in Europe, Asia, and the US. Following the lead of US stocks last Friday, European and Asian markets kicked off this week posting major losses as profit-taking from the recent bullish stock market run was abounding. Now, as these same markets have become more stable, the fear is that further reduction to the US’ Quantitative Easing monetary policy as well as recently poor Chinese economic data will translate into liquidity problems across the globe.

For this reason, all eyes will be on the FOMC this afternoon as they address the public in the wake of their most recent policy meeting. At this juncture a large majority of the marketplace is anticipating that the Fed will announce another $10 billion reduction to its monthly bond-buying policy. If this expectation comes to fruition QE will have been reduced from $85 billion in bond purchases per month to $65 billion in barely more than a month’s time.

Gold and silver are trading near even on Wednesday, just one day after posting considerable losses. The overall trading atmosphere thus far this week has been quiet mostly thanks to a lack of economic data from around the globe. The lack of fresh inputs is allowing precious metals bears to retain control even though equities and the US Dollar are not doing as well as they were a week ago.

Next Tuesday’s Federal Reserve meeting is at the top of everyone’s agenda and will continue to be so long as more tapering is a possibility.

Europe Seems to Be Doing Everything the Right Way

If you think recent economic data out of the United States has been strong then you must not be hearing any of the data coming from the EU. As of late, every single piece of economic data in Europe is astoundingly positive and is translating into a stronger investor outlook on the region as well as more interest in European equities. In fact, a report released today indicated that demand for 10-year bonds in Spain is at its highest point in years. Also, demand for bonds in Portugal and Ireland were recently reported as being on the rise.

If you can recall a few years back, the Irish and Portuguese economies were on the verge of collapse. Now, however, these same economies are showing consistent signs of growth and are just two of many EU economies crawling their way back from the worldwide recession of 2008. So long as the strong economic performance continues in the European Union there is little doubt that 2014 will be a great year for a region that really needs one.

BOJ’s Latest Move, or Lack Thereof

The Bank of Japan ended their most recent meeting early on Wednesday with no major policy changes to speak of. Currently the BOJ is employing easy money policies in an effort to increase annual price inflation to 2% within 2 years. Japan and the rest of Asia have been fighting off deflation at every turn for the past year or more.

Just the other day the central bank of China injected more cash into its economy in an effort to fight continually rising short-term interest rates. The new injection of cash is also being used as a way to satisfy Chinese citizens’ need for money ahead of the Lunar New Year that is being celebrated towards the end of the month. The Lunar New Year is often celebrated with gift-giving and one of the preferred gifts is gold bullion. The Lunar New Year being a little more than a week away means that demand for precious metals is high at the moment.

Gold and silver are trading slightly down in the first half of Wednesday thanks to some stronger retail sales reports out of the US. Last Friday’s weaker than anticipated employment report for December pushed gold forward while simultaneously causing many investors to worry about the strength of the US economy. This week has thus far been generally quiet which explains why price movements by both stocks and precious metals have not been too dramatic.

If investors are further reassured that the US economy is performing well in the coming days it will not bode favorably for precious metals.

Retail Sales Reports Lift USD

Upbeat retail sales reports in the United States lifted the Dollar as well as most stocks early in the day on Wednesday. These reports also mitigated the negative impact last Friday’s weak employment report had on the market. In case you missed it, non-farm payrolls for this past December were reported as growing by only 74,000. Compared to market expectations of a 200,000 payrolls increase in December it is easy to see why investors were so shocked when the data was made public. The disappointing employment report was even more perplexing for investors who have been hearing nothing but positive reports from the US economy as of late.

Before US stocks began making gains today, European stocks were well on their way to a positive Wednesday. In fact, most stock markets around the world had a pretty solid day today, a perfect complement to the World Bank predicting worldwide economic growth in 2014 would be higher than originally expected. Should global stock indexes continue to have days like today it will be hard for gold and silver to gain any sort of momentum. In all, precious metals have lost a lot of their luster as safe-haven assets recently thanks to increased economic strength in both the US and Europe.

Perhaps even more adversarial to precious metals today was a report claiming that two voting members of the FOMC made it clear that they want bond-buying (Quantitative Easing) to be completely done away with by the end of the year. Last month the Federal Reserve decided to taper its $85 billion monthly bond-buying program by $10 billion. The decision to taper QE worked against precious metals, which only leads investors to believe that further tapering measures would have a similar effect.

Gold and silver are trading down midway through the day mostly thanks to a strong US Dollar and some upbeat US employment data. Investors are still anxiously awaiting the release of the latest FOMC minutes that are due out later this afternoon.

The rest of this week is going to be full of activity as there is plenty of economic data and noteworthy events for investors to pay attention to.

Upbeat Employment Data Boosts US Dollar

Before markets even opened in the United States gold and silver were already facing an uphill battle due to the US Dollar reaching month and a half highs. The Dollar gained even more strength when the ADP employment report was released and posted job additions that were well beyond market expectations. Officially, most people were expecting to see about 200,000 jobs added this past December. According to ADP, almost 240,000 jobs were added in December, handily beating the expectations of the market.

This news pushed the US Dollar up even further and ended up putting an increased amount of downward pressure on gold and silver. Additional US employment data is due out on Friday, including the non-farm payrolls data from this past December. Like the ADP report, the non-farms data is expected to show a 200,000 payroll increase from a month ago. If this is so, this week’s data will only act as a complement to somewhat consistently strong employment data posted over the past few months.

Other noteworthy events happening this week include the European Central Bank monthly policy meeting which is scheduled to take place tomorrow. There are no major policy changes expected to take place at this month’s meeting, but that will not keep investors from maintaining a close watch over the meeting’s proceedings. Also due out later this week are reports on Chinese trade and inflation levels. Chinese stocks have been under-performing as of late and as such investors will be hoping for some help from this week’s reports.

Gold and silver are holding steady in the mid-morning hours of Wednesday as investors anxiously await the outcome of this week’s FOMC policy meeting. While there is a large quantity of investors who think we will hear a tapering announcement today, there is no saying for sure whether such will be the case or not.

Gold and silver have not fared too well so far this week, highlighted by yesterday’s decently large losses.

Policy Meeting and Possible Outcomes

As the FOMC puts the final touches on their meeting, the investing world is brimming with eager anticipation. The post meeting statement, typically made by Fed chairman Ben Bernanke, is the event that will have every investor’s attention.

With US economic data as strong as it has been recently, investors are growing more confident that this week’s meeting will finally yield a reduction to Quantitative Easing. After all, members of the Fed who have come out as opposing a more immediate tapering have cited slow economic growth as their main reasoning. Now, with US economic growth seemingly on the up and up, many investors feel as though the FOMC will have no choice but to taper this time around.

Others, however, are not so sure that the Fed will announce tapering this afternoon. Some investors think that it will not be until sometime in 2014 until the easy money policy is reduced. Regardless of when QE is actually tapered, it seems as though the market is already factoring in the announcement. Because the market is and has been expecting the monetary policy to be reduced, it will not be such a shock when it actually happens. Not only that, but the fact that the market has been expecting QE to be reduced only means that those who would have sold their gold and silver upon a tapering announcement have likely already done so. This can be seen in the last few weeks’ worth of declining gold and silver spot values.

While there was some positive economic news out of the EU earlier this week, things across the globe seemed to have calmed down a bit.

Gold and silver, after performing extremely well in the first two days of the week, are suffering a bit of a corrective pullback through the first half of Wednesday. Though there are not many economic news stories for investors to discuss, a budget agreement reached by US Democrats and Republicans is stealing all the headlines in the United States.

Apart from the budget deal, investors are focusing more and more on the upcoming FOMC policy meeting, scheduled to kick off on Tuesday of next week.

Budget Deal Reached, Shutdown Avoided

In an unprecedented, and frankly unexpected move, US lawmakers drafted a bipartisan budget deal that will last for the rest of this fiscal year. While this move was unexpected, it was a positive one due to the fact that the budget deadline was once again fast-approaching. Contrary to popular belief, the budget deal that was reached during the government shutdown in October was only a temporary one. This meant that if lawmakers could not draft another, permanent budget by Christmas we would have to weather yet another government shutdown.

Though this is big news, the precious metals market did not react to it too much. Now that the budget issue is figured out, US lawmakers now have to worry about the fast-approaching debt ceiling deadline.

China to Continue Stimulating Economy

A report out of China showed that Chinese banks significantly increased their lending in November. This report has caused many to believe that China and its monetary officials are still set on stimulating the Chinese economy, despite the risk of widespread, dramatic inflation.

This week has been especially slow as far as economic news is concerned, but that has not stopped investors from speculating with regard to the outcome of next week’s FOMC meeting. While many investors believe that we will hear a tapering announcement as early as next week, others are convinced that tapering will not be enacted until sometime in 2014.

Gold and silver made some decent gains today thanks to a large amount of bargain-hunting buying. While the rest of the week is expected to pick up with regard to economic data, investors are enjoying today’s respite as today was the first day in a while where gold and silver didn’t post losses.

Moving forward into the latter stages investors are anticipating a few bits of economic data out of the US. Included in this economic data is the latest US jobs figures as well as tomorrow’s GDP report.

Economic News Galore

Apart from the release of the Federal Reserve’s beige book today, the ADP national employment report for November was also released. Much to the marketplace’s surprise, this employment report came in much stronger than the market had expected. Despite the report’s strong reading, however, bargain-hunters were buying up so much gold and silver that even the downward pressure placed on precious metals was not enough to force losses. Instead, gold and silver reclaimed most of the losses they recorded on Tuesday.

While today was a nice bit of respite from recently dismal runs by both gold and silver, do not expect the positive gains to continue. So long as the rest of this week’s economic data comes in strong, which it is expected to, gold and silver will likely be subject to the wrath of market bears.

Adding to that, if the next few days’ worth of economic data beats market expectations, the notion that QE might be tapered before the end of the year will gain strength. Currently, the world marketplace is obsessing over the timing of QE’s tapering and many think that this month’s FOMC meeting is when the tapering will be put into action. There is no real way of finding out whether QE will be tapered or not though, so we will just have to analyze US economic data and patiently wait until the 16th-18th of December, when the FOMC meeting is scheduled to take place.