By week’s end, both gold and silver ended closer to even and might have eked out some small gains. On the whole, this week was exciting for a few different reasons, but it was clear to see that the main focus of investors was the European Central Bank meeting, which took place on Thursday. Apart from that, there was a good bit of other economic data for investors to contend with.
For now, gold and silver are still in good positions and seem to be ahold of some nice momentum heading into next week. As we look ahead, there is a lot that will be on the minds of investors.
OPEC Meeting Rumored for End of Month
A somewhat interesting development that took place during the middle part of the week was the fact that OPEC, the large oil cartel, announced that they would be having another meeting closer to the end of the month. As it stands right now, the meeting is set to take place on March 20th and is rumored to be about a production freeze that would involve every member-nation of OPEC.
While this sounds like a great way to combat the growing oil supply-glut, the reality of the matter is that a production freeze will be harder to implement than most might think. The reason for this is due to the fact that some OPEC nations almost wholly rely on oil exports, so to convince them to stop exporting the one thing they export is going to be difficult. Other countries such as Russia do not necessarily only rely on oil exports, so a production halt may not hurt them quite as much as it would a country like Venezuela. It will be interesting to see how this plays out, but we do know that something needs to be done about the supply-glut.
Weekly Jobless Claims Fall by 18,000
After rising two weeks in a row, first-time claims for unemployment benefits fell by nearly 20,000 last week, bringing the seasonally-adjusted average number of claims back below the 260,000 threshold. This news was encouraging, especially after a few consecutive weeks of rising claims. Now, as we move through the rest of March it will be interesting to see if the US employment sector is able to hang on. For now, employment in the US is one of the very few bright spots for the economy.
ECB Slashes Interest Rates to 0%
Heading into Thursday’s monthly European Central Bank policy meeting most people were expecting to see the ECB announce an increase in their ongoing stimulus measures. While that was true, no one expected that things would go the way they went yesterday.
Much to the surprise of everyone, the ECB cut the region’s main interest rate to 0% from a previous interest rate of .5%. In addition to this, the interest rate on bank deposits was boosted from -.3% to -.4%. This was made in an effort to encourage banks to lend more rather than sit on funds.
Now, the real test becomes whether any of the moves made by the European Central Bank will have an impact in bringing the European economy back. As it stands, the EU has been struggling economically and the institution of Quantitative Easing measures has not done much to spur growth so far.
As we move forward through the rest of the month of March, it will be interesting to see how the US and European economies progress. At the present moment in time it seems as though both regions are going to see darker times before things begin to improve, however it is never a good thing to be overly confident about what the future holds as it can be quite unpredictable.