Precious metals spot values are trading lower for yet another day to cap off what has proven to be yet another disappointing week. Now, gold and silver are poised to post weekly losses for the third consecutive week. Currently, the overall market atmosphere is such that precious metals are being overlooked by investors who are more focused on equity markets as well as currency markets.
As we look ahead to next week, it is highly likely that things will remain somewhat subdued. There isn’t a plethora of economic information scheduled to be released, and because of that I expect that investors will continue to focus on equities as well as currency markets.
FOMC Meeting Offers No New Clues
Prior to this week getting underway, there was no doubting that the week’s biggest event would come over the course of Tuesday and Wednesday in the form of the FOMC’s latest meeting. There has been so much speculation with regard to the future of interest rates in recent weeks and months that almost every investors who was paying attention was hoping to hear some more information with regard to when interest rates would be raised and by how much they would be raised by.
By meeting’s end on Wednesday afternoon, the market was mostly disappointed due to the relatively neutral nature of the FOMC’s post-meeting statement. According to the Fed, the economy is improving, but there is still definite room for improvement. The language utilized by the Fed stated that there was still “considerable time” until interest rates would be raised. This language was not at all unfamiliar, but was still deemed to be hawkish for precious metals simply because of the way investors reacted.
For equities, the use of the “considerable time” language was beneficial because it still allows for time to invest in the bullish US stock market. For the US Dollar, the FOMC meeting was beneficial simply because investors are confident that higher interest rates are on their way. All in all, this news was wholly negative for gold and silver, as indicated by the fact that they are headed for yet another weekly loss. Hopefully things begin to turn around next week, but with few major pieces of economic data on the table, it is not looking like such will prove to be the case.