Precious metals did not do much moving to close out the week, mostly thanks to the fact that investors are already beginning to celebrate the Easter holiday. All in all, this was quite an eventful week for a handful of reasons, unfortunately none of those events or pieces of data very much played in the favor of gold and silver. The big headline of the week was a terror attack that was carried out in a few different locations throughout the city of Brussels, Belgium. These events rocked the world and sent Belgium grinding to a halt, but in the end the global marketplace seemed to barely skip a beat in the wake of the tragedy.
Seeing as Easter falls on Sunday, I anticipate that the early parts of next week will yield very little activity. For gold and silver, this may mean that the downturn we have witnessed over the past two weeks may be extended to some extent. With that being said, however, spot values have fallen so far that bargain-hunting might make an appearance to kick off the last week of March trading.
James Bullard Calls for April Rate Hikes
James Bullard, president of the St. Louis Federal Reserve, is almost always one of the more outspoken members of the FOMC. This week he lived up to that billing as he called for the Fed to raise interest rates again in April. While most of the market has become convinced that rate hikes are not likely to happen for another few months, Bullard feels as though it is safe to make that move right now.
The reasoning for his eagerness to hike rates is two-fold. For one, he believes that the overall unemployment rate will fall to 4.5%, if not even lower, by the end of the year. Perhaps even bolder of an expectation is his for inflation, as he sees the overall rate of inflation hitting the Fed’s pre-set 2% target. It is extremely difficult to confirm either of these two things barely a third of the way through the year, but Bullard spoke with confidence and really got investors thinking. Now, this gives April’s FOMC meeting just a bit more allure than it might have had a week ago.
Brussels Attacks Linked to ISIS
Just as US markets were opening on Tuesday, headlines began streaming across televisions, talking about a series of explosions that had rocked Brussels, Belgium. Not only were bombs set off in the city’s airport, but also in the subway as well. These attacks, as they usually are, came unexpectedly and forced Belgium into a state of terror.
For gold and silver, these attacks really failed to prompt the type of safe-haven demand you usually see in the wake of events such as these. All in all, the global marketplace did a good job of not succumbing to the fear these terrorists so viciously wished to create.
Oil Rally Stopped
Beginning last week and carrying into this week, the price of crude oil was making somewhat steady strides forward. In the lead-up to a major OPEC meeting where production cuts were the main topic of discussion, some investors were confident that OPEC would do something about the growing supply-glut that has been forcing the price of oil steadily downward for much of the past year.
Unfortunately, last week’s OPEC meeting was not as fruitful as expected, and the rally for oil was brought to an end. Things got even worse for the commodity when, on Thursday, it was announced that the US stockpile of crude oil was more than 3 times what it was estimated to be. Though the future of crude oil’s price remains uncertain, it is difficult to envision the spot value doing anything other than lose value.