As of the writing of this post early Friday morning, precious metals are conceding some value. All in all, however, this week has been extremely beneficial for precious metals and even saw spot values surpass some key points of technical resistance. Though the market is currently bullish on gold and silver, it will be interesting to see how metals fare as the next few weeks play out. Currently, gold is sitting above the $1,300/ounce threshold while silver is comfortably above $18.
To be quite honest, investors this week had little to focus on apart from the European Central Bank meeting. With a big announcement expected to be made by the ECB, it is no wonder that investors were mostly preoccupied this week. In other news, the governments of Japan and China both released reports regarding their economy this week. Both countries said that the continued decline of crude oil will help spur both economies along. This is extremely good news for a region of the world that has not had the best last 12 months from economic and financial perspectives.
ECB Introduces QE Plans
Perhaps the worst kept secret of the year will go to the “secrecy” surrounding this week’s European Central Bank meeting. Seeing as the EU has struggled economically for the better part of the last year or more, it was no secret that they were in need of some economic help. Because of these struggles, it was eventually believed that the ECB was going to soon introduce a monetary plan that very closely resembled the quantitative easing policies that played out in the United States.
Up until last week, however, any talk regarding QE in Europe was nothing more than speculation. Thankfully, a ruling last week by the European Court of Justice made it legal for the ECB to pursue QE plans, and that is exactly what they announced at their meeting yesterday.
Officially, the EU will not see QE put into effect until early 2016, but the impact of the decision is already playing out. Thanks to this particular plan involving the purchase of 60 billion euros worth of bonds every month, the Euro has suffered a fairly decent hit. For precious metals, yesterday’s announcement has so far resulted in gains, but it will be interesting to see if those gains can be retained as we head further into the New Year. Still, no one is scoffing at the fact that both gold and silver are hovering near 6-month highs and are quite honestly looking like edging higher. Next week will be the first actually slow weeks of the year, so no one is quite sure what to expect from a precious metals price action standpoint.