Gold and silver had a lackluster week as losses persisted for the second consecutive 5-day session. To be fair, precious metals never really had a chance to make any gains due to a quieter world marketplace.
The biggest news story of the week involved statements made by Ben Bernanke’s possible successor as chairperson of the Federal Reserve.
Janet Yellen’s Statements
If you have never heard of Janet Yellen now might be a good time to acquaint yourself. As it stands she is the most likely person to succeed Ben Bernanke as the chairperson of the US Federal Reserve. Due to this fact, she was scheduled to speak in front of the US Senate Banking Committee this week, and what she said was a bit surprising to many.
In her statements, Ms. Yellen claimed that the unemployment rate is not low enough nor is economic growth robust enough for the Fed to taper Quantitative Easing. She maintained that while the US economy has undoubtedly shown signs of increased strength as of late, there is still room for improvement. Her remarks were favorable for precious metals which experienced modest gains on the day.
A day later, Janet Yellen answered questions from US Senators and her remarks echoed the ones she made a day earlier. Despite her comments, gold and silver still ended up having a fairly disappointing week. The US Dollar is still strong and there are still plenty of people who believe QE will be tapered at the December FOMC meeting, both of which are putting heavy downward pressure on gold and silver.
In other news, the EU’s 3rd-quarter GDP was released late this week and it showed some less than stellar annualized growth. When compared to last year’s 3rd quarter, the EU only improved by a margin of .4%. While any growth is positive, this year’s third quarter growth was .8% weaker than the second quarter’s. The weak GDP data more or less validated the ECB’s recent decision to cut the regions key lending rate. It must also be noted that there is a fairly strong contingent who believes that the ECB decision will translate into more of a time allowance before the FOMC has to decide what to do with QE.