For a second consecutive week, gold and silver spot values moved downward consistently. To be fair, there are very few factors present in the marketplace to lift metals, and plenty of factors working to push spot values downward. Gold and silver are both sitting at multi-month lows and do not look like they are going anywhere in a hurry.
Now, the question becomes what the future holds for metals. We have not seen such low spot values in years, and there is a fear that prices might fall even further. You see, most of the market has factored in the possible rising of interest rates into current investment decisions, but the quantity of people who have factored hiked rates in is estimated to be at around 60%. Being that many more people have not made investing decisions based on the presumption that rates will be hiked, gold and silver spot values may move downward even further. For mines, this is especially bad news as layoffs and production stoppages seem unavoidable. It will be truly interesting to see what happens over the course of the next month or so.
Terror Attacks Shake Up Marketplace
Last Saturday, Islamic extremists reigned terror on the city of Paris, France. Via detonated explosives and shooting rampages, the terrorists claimed the lives of nearly 150 people. The following days saw tactical raids happen all across Europe in an effort to thwart further attacks. A scheduled soccer match in Germany was called off due to a credible threat that something might happen at the stadium in Hanover, Germany.
Initially, word of the attacks pushed spot values upward, as situations of turmoil usually do. Quickly, however, spot values retreated once more once things calmed down. Being that rates are still expected red to be risen before the end of the year, it is going to take much more than one isolated event for spot values to gain much of any footing. ISIS and other terror groups have vowed that more attacks are coming in places like Washington DC, New York City, and Rome, so it will be interesting to see what the next few days and weeks have in store.
Light US Economic Data, Fed Minutes Eyed
This week did not offer much in the way of economic data, but we did receive some housing market news. According to the data released on Thursday, housing starts during the month of October fell by 2%, which was a larger margin than what was expected. This wasn’t the best news, but seeing as the number of permits to build new houses increased dramatically during October, most are confident that the US housing market is doing just fine. The one lingering fear, however, is what raised interest rates might do to the purchasing of new homes. After all, higher rates mean more expensive homes, and that may seriously diminish the growth realized by the US housing market.
In addition to the housing data, the minutes from the Fed’s October meeting were made public. For investors, the minutes were interpreted as showing a Federal Reserve that is intent on raising rates before the end of the year. Barring any catastrophic economic or geopolitical development between now and the Fed’s December meeting, investors expect rates to be risen. Moving forward, howeverm you can still expect that the main focus across the global marketplace will be any data or commentary that is perceived as having some sort of impact on whether or not rates are actually raised.