Gold and silver spot values finished the week in elevated positions for the first time in the last three. Though this week proved to be generally quiet and lacking any fresh economic data, it also proved to be a positive one for metals by the time things were said and done. Rallying US equities finally cooled off and allowed spot values to edge higher after last week’s significant losses. Now, as gold is flirting with the possibility of once more crossing over the $1,300 threshold and silver once more on the verge of breaking through $20, investors are beginning to take a bit more interest in safe-have assets.
US stocks finished this week posting losses for the first time in a month, an encouraging sign for those who are hanging on to gold and silver despite recent devaluations.
Iraq’s Stability Being Called Into Question More and More
Up until Wednesday, there really weren’t any noteworthy events that we could label as the week’s biggest news. That all changed quickly as a result of more bouts of violence being reported throughout Iraq’s northern regions. The militant group called the Islamic State of Iraq and Syria, or ISIS, has been terrorizing towns and villages throughout a large part of northern Iraq for the past two weeks or so. At first, the isolated incidents of violence did little in the way of catching the market’s attention. But now, with more than 5 million people living under ISIS control, the marketplace’s full attention is being fixated on Iraq.
The stability of the country is being called into question more and more by the day. Iraqi security forces are finding it difficult to keep the militants in check as they seem to grow stronger by the day. While, for many, the ISIS invasion is coming out of nowhere, for others it is to be expected. The ISIS militant group has been calling Syria home for the past few years and has marketed itself to a number of smaller Islamic militant groups, many of which have joined forces with ISIS. Now that their numbers are in the tens of thousands, ISIS is attempting to carve out its own plot of land somewhere in southeastern or norther Iraq.
All of this violence has prompted safe-haven demand to make an appearance in the marketplace for the first time in a few weeks. The violence is also helping gold and silver due to the simple fact that there is very little else going on in the market this week. As investors head in to an uncertain weekend, it will be interesting to see how the situation in Iraq develops over the coming days and weeks.