Precious metals have had an interesting week, but also a fairly lackluster one as well. The market has not been dealt all that much in the way of economic data, so there hasn’t been all that much movement on the part of gold and silver other than a small price dip incurred earlier this week.
For now and for much of the foreseeable future, I anticipate that the attention of the market will be firmly fixated on what is going on with the US economy. Economic data point after economic data point continue to stream in, and recently most of it has been disappointing in nature. Moving forward, we will see just what kind of impact this continued string of poor data will have on the outlook regarding when interest rates in the United States might be hiked.
FOMC Minutes Make Splash
Straight from the time markets opened up on Monday, investors the world over were speculating with regard to what the FOMC minutes from the most recent meeting might have to say. Though the minutes were not due out until Wednesday, the thought of them consumed the attention of most investors.
Finally, on Wednesday, the minutes were released and, like the post-meeting statement, painted the picture of a Fed that seems to be doubtful of its ability to raise interest rates anytime in the near future. This news did not go over well with investors who would like to see rates hiked sometime this summer. At this point, summer rate hikes seem like an impossibility.
As if that weren’t bad enough, the only data from the United States that we have received this week has been downtrodden in nature. Just today we received word of downbeat existing home sales from April. After a few months of solid housing data, this report sticks out like a sore thumb to investors.
Greece Still in the Spotlight
As has been the case for the better part of the last month, Greece was once again called into the spotlight this week thanks to some comments from high-ranking government officials. Basically, the Greek government has come to the consensus that if a deal with IMF and the EU is not reached by the end of May, they very well may default on loan obligations.
Greece has been in negotiations with the aforementioned organizations for some time now, but progress made has been limited to say the least. Going forward, I am interested to see what becomes of Greece as a country. As of now, the prevailing belief is that if Greece is unable to honor its loan obligations, the Mediterranean country will be forced out of the EU. This is something that investors are curious about as many have no idea what it might mean for the wider marketplace.
Looking ahead to next week, it is imperative that investors begin preparing themselves for the next FOMC meeting. This meeting, though important, is not expected to bring about much in the way of new information. I expect that the Fed will allude to the fact that they might not raise interest rates, but I would not be surprised to see them avoid the subject altogether. Right now is an interesting time for the global marketplace, and one that will very likely determine the landscape of the investing world going forward.
For gold and silver, there is absolutely no way to tell what the future holds. Last week’s solid gains were diminished this week, but metals are still in a decent position overall so it will be interesting to see what happens.