What started out as a great week for precious metals quickly turned into another nightmarish 5 days. While the Federal Reserve chairman’s speech to Congress was supposed to boost precious metals, it ended up having little to no affect on them. The Italian election, which many had also thought would be beneficial for precious metals, showed no clear-cut winner and thus did little of anything to affect gold and silver.
European Woes Continue
Sunday and Monday were huge days for Italians as they took part in the election of a new president, however the election did not run as smoothly as many would have hoped. Two candidates received roughly 30% of the popular vote which led to a bit of a tie. Now the Italian government is scrambling to figure things out, all the while investors are unsure of their next actions.
In addition to Italy falling apart at the seems, the rest of Europe began to focus, once more, on their economic adversity. While there are small signs of economic progress, they are not very convincing for most investors. Gold and silver reacted to these problems by not acting at all.
The Fed Speaks
Whenever the Federal Reserve has meetings or needs to speak to Congress it usually means for big news for precious metals. This time was different because even though Chairman of the Fed, Ben Bernanke, delivered news that was good for gold and silver, the metals both took downward dives.
The news that Bernanke delivered was that Quantitative Easing (QE) was not going to come to an end any time soon. Earlier in the month there was rumors circulating that the Fed might end the monetary easing program, but Bernanke quelled these fears. While his speech had positive implications for major US stocks, precious metals reacted negatively.
The Federal Reserve’s meeting did little to help gold this week, but many experts are sticking to the sentiment that QE is going to be good for gold and silver in the long run. It is hard to get a grasp on gold and silver’s next moves because all movements as of late have been sporadic. Many hope that the marketplace calms down somewhat so that they are able to ascertain a better grasp on what investments moves to make or refrain from making,
At the end of the week gold moved from $1,581 on Monday to $1,578 on Friday a loss of about 3 dollars. Silver, on the other hand, moved from $28.81 to $28.63 .
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