Gold and silver began this last week of August looking like they were going to build upon the previous two weeks’ gains. With the US on the verge of involving themselves in yet another war, safe-haven demand for gold spiked in the early part of the week, only to see spot prices fall back to earth once more.
Some positive economic news in the form of a better than anticipated second quarter GDP report and an increase in German business confidence was seen this week, though neither story had a major impact on the precious metals markets. As we move into September we will say goodbye to the quiet, uneventful weeks and welcome in a time of the year that will be a hotbed of economic and geopolitical happenings. All in all it was an eventful summer for metals as they declined significantly to start the summer only to climb back up once again towards the end. While today and yesterday saw spot values of precious metals take decent hits, many are convinced that gold and silver will continue to ascend in value.
US Military Intervention in Syria on the Horizon
For the last 2 years, a civil war has been going on in Syria between rebel fighters and the government regime. The war’s death-toll is constantly rising, but what is most surprising is the fact that a large quantity of the people killed have been innocent civilians, including women and children. Even though that fact alone should have been enough to see Western nations intervene in the bloody civil war, such has not happened yet.
More recently, however, allegations have been levied against the government regime which claim that the military has been using chemical weapons against its own civilians. This news was shocking to the world, especially because chemical weapons are a major red flag, even in wartime. Now, the Syrian civil war has caught the attention of Western nations, and most importantly the UN. When this week opened, the biggest news story indicated that the United Sates was on the verge of leading an allied intervention in Syria. Some people had expressed that the threat of war for the US was so imminent that we could expect attacks to take place by the end of the week.
This news helped drive up the spot values of gold and silver by making them appeal as safe-haven assets. In response to the potential of war, the USD and stocks from the US and Europe took nosedives. This saw gold and silver begin what was shaping up to be a week of solid gains, a third consecutive week at that.
Now, on Friday, it has been announced that the US and its allies are still unsure as to what they are going to do in regards to Syria. Because the threat does not seem as imminent now as it did a few days ago, the marketplace has mostly corrected itself as the USD has made up for most of its losses this week, as stocks have as well. As the US is observing the Labor Day holiday on this upcoming Monday, you can expect a quieter trading atmosphere, at least at the start of the week.