Gold and silver spot values will finish both the day and week only slightly higher than where they opened. Despite precious metals and other safe-haven assets still possessing a lot of momentum, the quiet nature of the past five days from an economic and geopolitical standpoint really prevented either metal from making significant strides forward. Still, we must remember that the summer months are upon us and it is not at all atypical to see limited price action.
Another aspect of the market that has really been of assistance to gold and silver is the fact that the US Dollar Index has recently cooled off. After hitting multi-month highs by eclipsing the $81.10 mark not too long ago, the index has corrected itself and since fallen back down to a range in the low $80s. Not helping the USD Index at all this week was a sub-par 1st quarter GDP report from the United States which was released midweek.
Gold and Silver Retain Momentum After Quiet Week of Trading
With each passing day it seems as though the situation in Iraq, especially across northern parts of the country, is growing more and more dire. As ISIS continues to move southward toward the capital city of Baghdad, it has been reported that they are fanning out and spreading themselves across their newly occupied towns, cities, and regions. Their newly employed tactics serve the purpose of making them much more difficult to combat, especially in crowded cities where militant fighters cannot be readily distinguished from a common pedestrian. Despite the growing violence, the Iraqi civil war has managed to stay out of the headlines for a majority of this week. Still, there is no denying that it has provided metals with a lot of momentum that, in all likelihood, was enough to see them through this week on the positive side of things.
In other news, from Europe, the EU concluded their two-day summit by announcing the potential for fresh sanctions against Russia for its involvement in the annexation of Crimea. The EU, which alleges that Russia is providing pro-Russian rebels in Ukraine with intelligence, weapons, and armor, has demanded that rebel forces return border posts and release hostages by the conclusion of the weekend lest Russia be subject to increased sanctions. The Kremlin has yet to reply to the EU’s demands, but there is no doubting that this will be a source of intrigue for many investors over the course of the weekend and heading into next week.
For yet another week, the US Dollar was reported as declining in value when held against a number of other currencies, including the euro. As the USD continues to decline in value, and investors are convinced that the Fed will retain current interest rates for the foreseeable future, increased interest in precious metals is currently being viewed by most market experts as inevitable. With that in mind, however, stocks, especially US stocks, have been performing decently as of late and are not being as negatively affected by sub-par economic data as many would have been led to believe by viewing the USD’s performance alone. We will continue to watch the US Dollar’s performance as it will undoubtedly have a direct impact on the spot values of gold and silver going forward.