Gold and silver have taken part in a lot of price movement over this 5-day trading session, but almost all of it has been downward. A lack of any new bullish data is making it difficult for gold and silver to make gains and as the tensions in Ukraine continue to calm down, safe-haven demand has made its way out of the market. Not only that, but what few inputs we did receive this week have been bearish to say the least.
As it stands, gold has fallen below the $1,300 threshold and silver is sitting nearly 20 cents below the $20 mark. By the numbers, gold has lost roughly $100/ounce in a little more than a week’s time while silver has lost more than a whole dollar.
Bears Take Control of the Market
Last week, newly appointed Federal Reserve chairperson Janet Yellen alluded that Quantitative Easing would, in fact, be done away with by the end of the year. This news was not a big surprise to investors who have been speculating as such for a while now. What was surprising, however, was that Ms. Yellen also stated that interest rates in the United States may be risen as early as next spring. This news fueled more interest in US equities while simultaneously putting downward pressure on precious metals.
James Bullard, president of the St. Louis Federal Reserve bank, echoed Janet Yellen’s comments this week when he said that the US economy is improving and that he expects the overall unemployment rate to fall below 6% by year’s end. If this is the case, it will make the ending of QE by next year an even more likely possibility.
There were some pieces of economic news released earlier in the week, but it had a marginal impact on precious metals. If anything, the housing data released during the first half of the week worked against precious metals and made it seem as though the US economy is, in fact, stronger than what most recent economic data suggests.
The situation in Ukraine continues to sit comfortably on the back burner but the United States is leading the charge in attempting to isolate Russia from the rest of the world. As they convince more European nations to isolate Russia as well, we will have to just wait and see if anything comes of the now much calmer situation.