Gold and silver both finished the week in unimpressive fashion as a bearish FOMC statement has investors worried about carrying gold and silver with them into the near-term future. While the early stages of the week saw gold and silver remain mostly flat, Thursday brought about some hefty losses thanks to the FOMC statement.
In other news, plenty of economic data was released this week out of both Europe and the United States.
What the FOMC Meeting Means for Gold and Silver
In the days preceding the latest FOMC meeting, investors were confident that the Fed would not touch Quantitative Easing, the current monetary policy. When the FOMC’s latest meeting kicked off on Tuesday and subsequently concluded on Wednesday, investor’s expectations were met. The fact that QE had been retained was initially positive for precious metals spot values, though the Fed’s post-meeting statement proved otherwise. In this statement it was made clear that while the US economy is not strong enough to warrant a reduction or tapering of QE, it is still significantly stronger than it was only a few months ago.
This statement, coupled with the fact that Ben Bernanke was unavailable for comment, was perceived by the marketplace as bearish for precious metals. Instead of investors thinking that monetary policy in the US won’t be touched until the middle of next year, the growing belief is that the Fed may still be able to taper QE before the end of this year. In fact, many have pointed towards December’s Fed meeting as a possible time when they could execute a change to QE. As of now however, anything market experts say or believe regarding QE’s future will be nothing more than speculation.
US Economic Data
Despite the fact that investor attention was almost solely focused on the FOMC meeting, this week had its fair share of US economic data to offer. First was October’s employment report which came in weaker than expected. Compared to market expectations of a 150,000 rise in non-farm payrolls for October, the actual report indicated that payrolls only rose by about 130,000.
On the other hand, this week’s jobless claims report showed that there were 10,000 less people filing for unemployment this week. These two stories were important to investors, though they didn’t do much in the way of affecting precious metals’ spot values.