Gold and silver continued on their over half a year decline this week as both metals posted fairly large losses. While these losses have completely sucked the life out of any progress gold and silver might have made last week or the week before, they are not too surprising. There are a number of different worldwide economic factors giving gold and silver no choice but to decline in value. Unlike the huge, one-day loss we witnessed over a month ago, these losses are not due to one traumatic event, but rather a storm of events all going on at one time.

World Currencies Crashing, USD Rising

The Japanese Yen and Australian Dollar highlight what has been a weak of currencies declining in value relative to the dollar. The Yen has hit multi-year lows against the dollar all week while the Aussie dollar is hitting its lowest point in almost a full year.

These and other currencies crashing in value mean that the US Dollar has nowhere to go but up, and this could not be any more detrimental to gold and silver. In addition to this, stock markets are doing better in places like Japan and the United States than they have in years. A better outlook on world stock means that investors do not need to be so concerned with allocating their funds into safe-haven assets such as gold and silver. Lately, investors have completely shied away from the metals in search of what they hope to be more profitable investments elsewhere. So far it seems to be paying off but who knows if stock markets can maintain this impressive run for any extended period of time.

QE Up In the Air

At the end of last week it was reported that the US Federal Reserve’s Quantitative Easing initiative would be brought to an end sometime in the near future. While these were just rumors when they were first discovered, they were enough to bring down the spot value of gold and silver.

This week it seems as though those rumors had a bit of truth to them because we have heard very many reputable sources talk about possible time tables and reasons for why QE might be shut down. This all makes sense because the US economy, especially as of late, has been recovering from the 2008 recession with alarming success. Such success has caused market and money experts to agree with the fact that QE should be brought to an end soon.

Despite mounting evidence, gold and silver investors are hoping that the announcement of the end of QE will never be made. This is because an announcement of the end of QE will surely put even more downward pressure on both gold and silver.

The Week Ahead

As we move into the next week and the latter part of May, there will be only two things that precious investors will be keeping their eyes on.  The first of which is the value of the USD. If the USD keeps gaining in value it is unlikely that gold will be able to.

The second thing investors will be watching out for is an announcement on the future of QE. There is no set date for said announcement, but if it comes and the rumors are true, precious metals may dip even further.

Weekly Shift

Gold started the week at $1,448 and when all was said and done it was at $1,360 . This was a loss of $88. Silver started the week at $23.87 and at the end of the week was at $22.26 . A loss of $1.61.

Gold and silver can’t seem to catch a break as the first full week of May brought with it more disappointing weekly numbers. Two main reasons behind why precious metals did so poorly this week was a surging US dollar and poor economic news from China. While for the first few days of the week gold did not see any major losses, the early morning and overnight hours on Friday sealed the deal that this week would be one of losses.

Chinese Economy

Two economic reports out of China were poor for both the country and all those who are interested in precious metals. First off, the Producer Price Index for April was much lower than expected which has caused many people to think that perhaps China is not as strong of an economic powerhouse as previously thought. To add insult to injury, inflation rates in China this past April rose by a margin that was greater than expected. This news could cause the Chinese Central Bank to do what a lot of other countries aren’t, and that is tighten monetary policy. Tightening monetary policy is something that may be necessary as China does not want inflation to become too big of an issue.

Despite poor economic indicators, the nation as a whole is still seeing demand for gold unlike ever before. This is undoubtedly due to the low price of gold but the number of stores running out of stock of coins and bars is something that has never been seen before.

More Interest Rate Cuts

Last week we heard about the Central Bank of Europe slashing interest rates, but this week it was Australia and South Korea who joined in on the fun. Cutting interest rates is a way of trying to spur economic activity by urging people to take their money out of banks and spend instead of simply sitting on it and letting it accrue interest rates.

Many economists struggle with this thought, as they think manipulating interest rates past their normal levels brings unintended consequences. Only time will tell if lowered interest rates across the world will help save many ailing economies.

The Week Ahead

As we move to the next week of May, one of the main things to keep an eye out for is the value of the US Dollar. As of late, and in general, whenever the dollar rises in value gold and silver tend to move in the opposite direction. Part of the reason why the last day of this week saw $25+ losses was due to the fact that the dollar had an incredible run.

It is a strange predicament too because other currencies around the world are only getting weaker which means the dollar has all the room it wants to move forward, something it has been doing as of late.

Weekly Shift

Gold started the week at $1,471 and ended at $1,447. This was a loss of $24. Silver started the week at $24.20 and ended at $23.87 which is a loss of 33 cents.

Gold and silver didn’t do much moving this week as spot prices stayed in roughly the same position on Friday as they were at the outset of the week. Some big news out of Europe did little to affect the price of precious metals while investors in North America were keeping a close eye on the latest installment of the Federal Reserve Open Market Committee meeting. Demand for metals, especially gold, was still high this week but with much of Asia celebrating a holiday during the midweek it is no surprise that spot values remained more or less constant.

FOMC Meeting

Whenever the Federal Reserve’s Open Market Committee has a meeting the market watchers of the world pay attention. Usually these meetings can influence how the price of gold and silver moves but this time such was not the case. While there were a large variety of people who thought we would hear some news in regards to Quantitative Easing and whether or not it would be stopped or slowed down, but that was not the case either.

In fact, no major news was to be reported from the FOMC and there was literally nothing about when or if QE was going to be slowed or stopped. This news pushed gold and silver forward, but only slightly.

Some Positive European News

It seems as though Europe has been a hotbed for terrible economic performance as of late, and the European Central Bank had a meeting this week to try and fix it. With mounting financial problems the whole eurozone needs to do something before all of their economies are in ruin. Noting that fact, the ECB decided to cut interest rates by a quarter of a percentage point to .5%.

The hope is that lower interest rates will jump-start seemingly dead economies but we will just have to wait and see if their initiatives work out. It is hard to believe that reduced interest rates will not boost the economy, but stranger things have happened before.

The Week Ahead

As we move into the next week, one thing to keep an eye on is the spot price of metals. While this may seem like a no-brainer, demand for precious metals is still on the rise and with the Asian market going to be hitting on all cylinders next week many are anticipating a good week for spot prices.

In addition to that, it will be interesting to see how the European marketplace reacts to the newly reduced interest rates and I feel as though next week will be a good time to get a feel for how European investors are handling the ECB’s decision.

Weekly Shift

Gold started the week on Monday with a spot value around $1,466 and at the end of the week it was sitting at $1,469. This is a gain of 3 dollars. Silver, which started the week at $24.11, ended at $24.10. This is a loss of one penny.

For the first time in a while I bring news of positive results for both gold and silver. A rise in demand for precious metals across the board is the main culprit behind my metals performed so well, but some weak economic data from around the world helped as well. It seems as though US stock markets have ended their impressive run, but the US dollar still seems to be doing ok. That being said, investors are not too sure how long the dollar is going to be performing so well.

Rising Demand

As if you didn’t see it coming, gold and silver’s massive decline was followed by an increase in demand across the world. The price of gold at the beginning of the week was nearly $200 cheaper than it was only a few weeks ago which means that people have an insatiable appetite for metals. At first, the increase in demand did not translate into a higher spot value for metal, but that has changed.

In addition to the low prices spurring demand and spot values upward, an Asian holiday meant that they would increase even further. Asians are always heavily interested in precious metals which makes it no wonder why they gift gold and silver. Who knows if demand for precious metals will continue to increase.

Gold Becoming a Safe Bet

In economic times that have been as rocky as the times we have witnessed lately have been, there are very few things that have been a sure thing as far as investments go. Many experts believe that  gold and silver are becoming more and more stable as investment options. Economies all over the world have been hard to predict and most often disappointing, so investors are not too sure what their next moves should be.

After gold’s fall the other week, it has been on the rise fairly constantly. Many people believe that this rise will be sustained for the time being as gold and silver are becoming increasingly more reliable investments. There was also news of central banks all over the world increasing their gold holdings which only boosts investment confidence further.

The Week Ahead

The main focus of investors everywhere over the course of the next 7 days is the commodities market. Gold and silver, as well as crude oil prices, have been performing well over the past week or so and everyone is wondering if this positive run will continue. It would also be smart to keep an eye on the US economy as it has been doing sub-par as of late.

Weekly Shift

Gold started the week at about $1,409 and ended at $1,463 posting officials gains of over $50. Silver, on the other hand, started the week at $23.38 and ended at $24.10 which was a gain of 72 cents.

While the US stock markets have cooled off after their few week long boom, you would think gold and silver would pick up the slack. Nothing could have been further from the truth because right away, at the start of this week, gold and silver posted massive declines. In fact, we saw gold lose over $100 in one day which is something a lot of investors have not seen lately. The end of the week saw metals make some decent gains, but compared to what they lost earlier in the week, it is nothing more than a consolation prize.

G20 Meeting

The end of this week saw a G20 meeting taking place and as is always the case, market watchers were paying close attention. Literally anything that is said at these meetings has heavy implications on the precious metals markets, but it seems as though this time is the exception.

The meetings really didn’t accomplish much of anything which meant that gold and silver were likely not to be heavily effected, and they weren’t. While gold did post solid gains on Friday, none of this was due to anything said at the G20 meetings. It comes as no surprise that little was accomplished at the G20 meeting because many of the nations involved are much more concerned about their own, domestic economic issues as opposed to large-scale global ones.

Major Losses, Yet Again

When last week came to a close, not many people thought that precious metals could take many more hits. Little did we know, because as soon as the week started gold and silver took huge hits and were in worse of a situation than almost anyone could have anticipated.

As the week went on gold and silver remained in a fairly steady position. Many hoped that bargain hunters would swing the price of metals right back around but that was far from the case. Thursday and Friday saw gold and silver improve slightly, but this was not nearly enough to make investors happy.

The Week Ahead

The week ahead hold with it a bag full of mystery. Last week most people were convinced that precious metals were not going to fall any further, but it turned out to be quite opposite of most people’s expectations. We will need to closely watch markets next week in hopes that the US economy and precious metals will turn things around.

While there was not much news out of North Korea this week, it is important that we still stay aware of the ongoing situation there.

Weekly Shift

Gold started the week out at $1,488 and after heavy losses ended the week at $1,404; a loss of $84. Silver started the week at $25.98 and ended at $23.28; a loss of $2.70.

Gold posted yet another disappointing week as values for both gold and silver were down significantly for a second consecutive week. Despite the US economy cooling down and tensions throughout Asia, precious metals were unable to make the breakthrough that many had hoped they would towards the end of last week. While heavily invested people were upset yet again this week, bargain hunters can be expected to be out in droves due to the most recent dip in prices.

Gold Not Reacting

Usually when terrible economic data is released, gold’s value shoots up in response to people putting their faith in the yellow metal as opposed to anything having to do with a given country’s economy. The US is not only seeing an increased amount of people without jobs, they are also seeing some of the worst retail sales in just short of a year.

These two key factors, coupled with North Korea threatening the outbreak of war at any given moment, should be enough to make gold and silver gain in value, but such is not the case. This is a strange situation that many hope will be remedied sooner rather than later.

Cyprus Won’t Go Away

Even though, to us, it seems as though the banking situation in Cyprus is done and dusted, nothing could be further from the truth. The tiny European nation is once more in the news this week regarding their countries financial situation and the bailout that is supposed to help.

In response to the fact that they need more money to fund a bailout, the island nation is selling off more than 3/4s of its gold holdings. While this has little no effect on the euro, it made it pretty hard for gold to have a strong comeback like we saw last Friday. Instead, gold and silver both slipped a long way at the end of the day on Friday.

The Week Ahead

As we move forward into the next week of April, we will have our attention focused on a number of ongoing situations around the world. For one, we will be posted on every threat North Korea is making because, just like last week, the threats have been coming steady and strong to a number of different nations; now including Japan.

Additionally we will obviously be watching gold as it strives to pick back up after its most recent fall. If you though last week was bad, this week was worse, and at this point there is no way of being sure that next week won’t be even more terrible.

Weekly Shift

Gold started the week at $1,582, and when the week ended on Friday it was sitting at $1,479. This was a loss of $103. Silver, on the other hand. started the week at $27.32 and ended at $26.13. This was a loss of $1.26.

Gold and silver both had a rough past 5 days, and while things picked up on Friday, the week as a whole still was fairly dismal. Despite any headlines that justified a huge drop in the value of precious metals, they seemed to have jumped off a cliff over Tuesday and Wednesday. Things that we did focus on include a continually strong US economy as well as rising tensions in North Korea, just to name a few.

Europe Down, Metals Too

It seems like forever since there was a positive economic news story out of Europe, and if you are looking for one here, think again. Dismal manufacturing data coupled with the fact that Cyprus is receiving an even larger bailout than originally anticipated are just two of the reasons the world was shaking their collective heads at Europe.

The continent, especially the EU, lacks strong leadership which is an essential key in bringing them out of economic hard times. Like we have been saying for quite some time, maybe we will see Europe start to turn things around…next week.

North Korea Making Threats

Most people know and accept the fact that North Korea may not be run by the most level-headed individual, but this week helped us realize how not level headed the nation’s government is. Threat after threat have been streaming out of Pyognyang and most of them are directed at the US and South Korea. The threats mostly consist of the possible use of nuclear weapons against the US mainland and South Korea.

A lot of people are discrediting these threats, as they usually do, but it seems to be a bit more serious this go around. Any outbreak of war has implications on both gold and silver so it becomes imperative that we fixate our attention on the Korean Peninsula so long as these kind of heated threats are being thrown around.

The Week Ahead

As we move forward into next week it will be key to keep our eyes on both Korea and the US economy. The US stock markets and the USD have been thriving lately and this week has been positive yet again. As always it will be interesting to see how long both of these entities can sustain positive growth.

Weekly Shift

Silver started the week at $28.38 but quickly took heavy losses. Even though Friday saw the metal pick up over half of a dollar, silver was still down to $27.32 by the end of the day Friday. Gold, which started the first full week of April at $1,599 reacted in similar fashion to silver and somehow managed to only be down about 20 dollars when all was said and done.

The same country that headlined our market update is the same one that headlines this week as the world seems to have an insatiable appetite for Cyprus’ banking troubles. This time we have news of a deal that has finally been struck, although not everyone is happy about it. Now it is time to take our attention from Cyprus and fixate it on one of the other struggling European nations, but no one is quite sure which country quite yet.

Deal Reached in Cyprus

The last time we were talking about the Mediterranean country of Cyprus there was no final deal for how a bailout would be funded. It was no secret that a bailout was needed, but the average Cypriot wanted to hear no news of their bank accounts being taxed.

The original deal where all bank accounts in Cyprus would be taxed was done away with, but the new deal was not much better for Cyprus’ richer citizens. All bank accounts containing 100,000 euros or more will be taxed in order to fund the bailout. This deal was reached early in the week and on Thursday an almost two week long bank holiday was lifted as Cypriots were once more able to make withdrawals of cash.

Europe Still at Center of Attention

With the situation in Cyprus more or less resolved, it is time to take our attention from the Mediterranean to mainland Europe where a slew of other nations are in need of financial assistance from both the EU and IMF, or just one of the two.

Germany has been long thought to be the most economically stable nation in the region, but recent figures have proven that thought to not be so true. Then again, it is hard to imagine Germany would sustain a lot of economic growth as they were usually the first European nation to provide assistance, be it financial or otherwise, to countries in need. It will be interesting to see how Europe reacts to this continued period of economic decline.

The Week Ahead

As we move forward to the first week of April, our attention remains fixated on Europe as well as America. In the US we are looking to see how long their economy and dollar can sustain such high value. In Europe, on the other hand, the focus will be their innumerable amounts of economic issues as it seems that the situation in Cyprus is done and dealt with.

Weekly Shift

Gold started the week at $1,610, but dropped about 13 dollars as it ended the day on Friday at about $1,597. Silver opened the week at about $28.76 but also fell by almost 40 cents to finish at $28.37.

Two stories took most of the headlines this week, and they were a sticky bailout situation going on in Cyprus as well as a meeting involving the Federal Reserve. The Open Market Committee meeting brought with it, as it usually does, plenty of speculation that ended up being only that. Cyprus, a financially failing nation in Europe in need of a bailout had a lot to deal with this whole past week.

Cypriot Bailout Woes

It is no secret that there is more than a handful of nations in need of financial assistance in the European region, and believe it or not Cyprus is arguably one of the most needy of the bunch. Because of this the tandem of the IMF and the EU have been working to plot a sensible bailout of the small island economy.

The first proposal set forth by the two organizations involved a requirement that said if they were to receive a bailout, it would be at least partially funded by private bank accounts within the nation. This news obviously enraged many Cypriots which led to large groups going to ATMs and withdrawing all of their funds. Eventually this action caused most ATMs to run out of cash and forced the government of Cyprus to call for a bank holiday which has lasted all week. This news helped gold and silver because any time people are unsure of their paper money, they turn it into solid, precious metals.

Federal Reserve Meeting Sparks Speculation

The Federal Reserve had a meeting this week and to make a long story short, nothing is changing as far as monetary policy in the US is concerned. While this is now a fact, many people began to speculate to the contrary before the meeting even happened.

The meeting confirmed that monetary policy would not change and at the end of the day most precious metals investors were fairly happy about that news. The meeting, on the whole, did a decent job of helping both gold and silver.

The Week Ahead

The main focus on everyone’s mind this upcoming week will be the situation going on in Cyprus. Not many people were aware of their dire need for money but now that the story has been thrust into the spotlight it has grabbed the attention of the world. It will also be interesting to see if any more positive economic news will stem from the United States.

Weekly Shift

Silver had started the week at about $28.85 and by the time markets closed on Friday it finished just about the same way it started. Gold started the week at $1,598 and ended the week at $1,609 picking up about $11.

Silver and gold both had less than stellar weeks this week, but these ending numbers more or less replicate how precious metals have acted the past few weeks. The US economy is performing so well that it is really hard for metals to gain a lasting foothold that it could improve upon.

What Recession?

If you live in the United States, you are more than well aware of the fact that the last few years have not been anything to brag about as far as the economy is concerned. The main topics were the rising unemployment rate, falling production levels, and diving stocks, but all that is starting to turn around. Now, unemployment levels are in the news because they are falling, and stocks are making headlines due to their recent impressive runs.

The fact of the matter is that US is really starting to turn things around, which is good for the average American, but not so good for precious metals investors. Despite this, metals have been able to keep their head above water despite all economic indicators showing that the opposite should happen. It will be interesting to see if US stocks and the USD will be able to maintain their recent upswing.

Signs of hope in Europe

A bond auction in Germany earlier this week produced better than expected yields, which is contrary to what most people expected. This is just one small, isolated event, but sometimes all it takes is something small to propel a larger push forward.

All eyes will be on Italy as a bond auction there in the coming week will have major implications for how investors are feeling about the country and its newly elected president.

The Week Ahead

The upcoming week will focus on the US to see if their economy will continue to push forward or if it will slow down. Chinese manufacturing output and employment levels will also likely be a focus next week as both have been disappointing lately.

Weekly Shift

At the end of the week, gold had moved from $1,579 on Monday to $1,593. Silver performed disappointingly this week and it moved from $29.07 to $28.85.