Gold and silver found themselves in yet another very confusing week as closing metal prices changed dramatically from day to day. The beginning of the week looked to be great for precious metals but just as investors were beginning to lift their spirits, everything fell apart. By the time the week was over investors were left even more confused than they were at the end of last week.
Struggling Global Economies
If you thought the economic struggles in Europe were finished, you could not be more wrong. Confusing Italian election results are at the top of the list this week as Italian investors are more than frustrated with their government’s inability to even govern itself. Three candidates all finished the election with nearly similar percentages of the popular vote. The two front runners both had a little over 29% of the popular vote while the third place candidate finished with a little more than a quarter of the votes.
Additionally, the situation in Spain seems to be staying the same if not getting worse and speculators everywhere are wondering if Germany is going to continue to help struggling nations out. While Greece has not been mentioned in a while, make note of the fact that their government, too, is still in shambles.
China has been quiet as of late, giving credibility to the assessment that their once booming economy may be slowing down. Of course only time will tell if this is actually true or not, but early signs are a good indication that it is.
Federal Reserve Addresses Congress
It seems as though every few weeks the US Federal Reserve releases news that has significant affect on the value of precious metals. This week, people were anxiously awaiting Fed chairman Ben Bernanke’s speech to Congress because it was likely to have some impact on the price of gold and silver.
The main point of emphasis put forth by Bernanke was that the Fed’s pumping of money into the economy, also known as Quantitative Easing, will not be put to an end any time soon. This is seemingly good news for both gold and silver, but on the day the text of his speech was released gold moved backwards instead of forwards; a confusing result to say the least. Despite this, investment experts are still holding firm to the belief that gold and silver will see benefits from QE’s continued existence.
The Week Ahead
The main focus going forward is the struggle facing European economies. There are a multitude of nations that are in dire straights and many of them have little to no plan of action as to how they are going to remedy the situation.
Weekly Shift
Over the course of the week gold moved from $1,581 on Monday to closing at $1,578 on Friday. Silver, on the other hand, started the week at $28.81 and finished at $28.63.