Gold and silver are trading marginally lower on Friday but are going to finish the week having posted some decent gains. Currently, silver is hovering just above $20/ounce while gold is safely above the $1,300 threshold. It will be interesting to see if metals can hang on to these gains over the weekend or if profit-taking will drive spot values downward once again.
Precious metals were given a boost from a number of different factors this week, including the release of the latest FOMC minutes just a few days ago. Investors have been growing increasingly nervous about the possibility of interest rates in the US being risen as early as this time next year. However, after the minutes were released the general attitude amongst investors is that they may have initially overreacted and that interest rates will likely not be risen until a little later than a year from now.
Weak Chinese Data Surprises No One
For a second consecutive month, Chinese exports have declined by considerable, or at least noticeable, margins. This bit of news only works to add to recent fears with regard to the current status of the Chinese economy. What’s more, it also adds to the growing belief that the Chinese central bank will have to employ new monetary stimulus measures in order to offset recently weak economic performances.
Senior Chinese officials have spoken about the growing economic concerns and have said that while they are concerned, they are not going to rush into taking any action quite yet. In March, Chinese exports fell by more than 6%. This adds on to February’s decline which edged closer to 20%. As a result of this report we will continue to monitor any and all economic data coming out of China over the next few weeks. The Chinese economy is especially important to precious metals investors as the Chinese are the world’s leading consumer of gold and silver on an annual basis.
Crisis In Ukraine Back In The News
Despite it being almost completely out of the headlines for the past week or more, the crisis in Ukraine has made another appearance during this 5-day trading session. The market began paying closer to attention for a second time in recent history due to a number of reports highlighting a rising number of pro-Russia demonstrations throughout Ukraine. Though none of these demonstrations have resulted in any real violence, it has sparked concerns that political and ethnic divides will yield violence sometime in the near future. The worries about a possible Ukrainian civil war of sorts has prompted safe-haven demand for precious metals to spike.
Adding to that, Russia has also been seen massing large quantities of troops along its border with Ukraine. A number of international bodies have condemned Russia’s actions and have repeatedly asked the large Eastern European nation to stop provoking their Ukrainian neighbors. As has been the case throughout this entire crisis, the Kremlin has remained obstinately defiant.
We will continue to watch this situation over the weekend and into next week in order to see how it will further impact precious metals.