Precious metals ended up closing out the week and month in fairly poor fashion, with losses abounding over the past week or more. In their defense, precious metals have recently been falling victim to a general lack of noteworthy events or pieces of economic data. Though it is typical for August to be a slow month with a low trading volume, it has not been of any aid at all to precious metals. Instead, the quieter market atmosphere has allowed for stock and USD bears to seize control. With the dawning of September next week, the overriding hope held by most investors is that they want to see the marketplace pick back up and become a bit busier.
This week did bring about some focus on the geopolitical tensions in Ukraine, but for the most part these stories were listened to one day and then completely forgotten the next. With that said, it is important to note that Ukrainian military officials claim that Russian troops have crossed over the Eastern border and have since taken control of a number of towns and villages. Though they initially denied this report, it became clear this morning that Russian troops are, in fact, taking up post within Ukrainian borders. This news limited the selling pressure being felt by gold and silver, but only such that bigger losses turned into marginal, negligible ones.
Looking Ahead to September
As we bring this week and month to a close, it is clear that August was not the kindest month to precious metals. Thanks to surging US equity markets, an ever-improving US Dollar, and a growing belief that interest rates will be raised sometime earlier next year, the market is one that does not lend itself to increased purchases of precious metals.
With next week set to bring about a slew of economic data as well as the most recent meeting of the European Central Bank, all that may change. With that said, however, a more action-packed marketplace does not necessarily lend itself to precious metals. Should US economic data continue to improve and the US Dollar continue to add value, there is no saying what the future holds for precious metals. Still, we anxiously await next week and everything that the market will bring along with it.