Unless you have been under a rock for the past five days you are likely aware that precious metals have taken significant dives. Bad economic news, coupled with last Friday’s huge hit was enough to drive gold and silver to low points that they have not seen for almost a full calendar year.
The United States Fed, specifically the Federal Open Market Committee, announced that the US is experiencing economic growth that is significant enough to potentially stop their massive asset-buying program in its tracks.
Currently the Fed is buying up assets in order to flood the market with large amounts of cash, thus bringing the value of the dollar down. A diminished dollar makes for more fervent economic activity as well as makes our exports for other countries to purchase. Since their plan, which has been labelled Quantitative Easing (QE), has seemingly worked up to this point, it may not be needed going forward. The final decision about QE was to make no decision at all, instead they put taking any action off until their meeting in March.
This action, or rather inaction, left investors to speculate and all that speculation caused a massive sell-off of both gold and silver the likes of which we have not seen in recent history.
Positive Outlook Persists
Despite the last 7 days being nothing but terrible for precious metals, most experts maintain a positive outlook for the future. Most attribute the fact that Democrats and Republicans are consistently locked in stalemates in Congress to gold’s fortunes going forward.
More often than not, rocky economic climates tend to benefit precious metals. Until anyone in the US government can make lasting decisions, gold and silver have positive futures.
When the week had finally wrapped up, the final numbers are not as disappointing as they were last week, but are not too far off either. Gold dropped $29 dollars this week, moving from $1,610 to $1,581. Silver was down about $1.19, dropping from $29.98 to 28.79.
This market update is provided weekly with analysis. You can always view the gold or silver price today via our on-site charts.