Gold and silver both did a good bit of moving this week, but when things were all said and done both metals were more or less in the same position they were at the beginning of the week. We have seen a lot of risk aversion by investors around the world while simultaneously seeing bond yields across the globe rise considerably. While there were very few official economic data reports to talk about this week, there was a lot of economic activity that at least deserves a mention.
Over the course of the past 4 or so days, and even a little bit longer than that, we have been witnessing a few occurrences that are worth mentioning. First of all, we have seen investors trying to avoid risk as much as they possibly can. Though this is not a surprise due to the uncertain nature of the world economy, it is a cause for concern.
Additionally, investors around the world seem to be getting rid of any investments in mid-level currencies such as those in Thailand, Indonesia, and Malaysia. Losing faith in paper money from around the world is a good sign for gold and silver so precious metals investors are hoping that this kind of activity continues.
The Asian Marketplace
If you can remember back to about a month ago, you likely remember the unprecedented positive run that the Japanese Nikeei Index made. Over the course of a few weeks it seemed as though Japanese stocks were infallible and that they could do no wrong. After setting record highs, investors took a renewed interest in the Asian region. The success of Japan and its stock market was short-lived, however, because nowadays we have seen nothing but large-scale declines by the Nikkei Index as well as other Asian stock markets.
Since last month’s high, the Nikkei Index has lost over 20% of its value and is showing little to no signs of improving. On Thursday alone the Index lost about 6% of its value after posting a few modest gains on Wednesday. The Chinese stock market also performed dismally on Thursday, the day after a public holiday.
If such terrible economic figures continue to be reported out of the Asian region, we will soon be comparing Asia to Europe, which is not a good thing. Despite Asian stocks doing terribly recently, the Japanese Yen has made some decent gains against the US dollar in the last few days which is at least some good news for Japan.
Also becoming worrisome to investors is the fact that easy money policies from around the world may be put to an end sometime soon. With the Federal Open Market Committee of the United States having a monetary policy meeting next week, you can expect speculation to abound in the next few days.
Like was stated earlier, gold and silver did a little moving but all in all ended up more or less where they started the week on Monday. Gold started the week at $1,381 and by the end of the day Friday it was sitting at $1,390.
Silver started the week at $21.65 and managed to make some decent gains and finish the week at $22.09.
This market update is provided weekly with analysis. You can always check current spot silver by watching our on-site charts.