Spot values of gold and silver have been up and down all week, and while the first three days made investors think that it would be a week of losses, the last two have helped metals salvage the week. All in all it seems as though gold and silver are going to end the trading session on Friday in more or less the same position they were in when the week started on Monday.
Thanks to some contradictory statements from the Fed as well as some upbeat economic news from places like Europe and Asia, gold was facing up against some heavy downward pressure for a large majority of the week.
Upbeat European Economic News
It is no secret that the overall European economy has been struggling for almost all of the 2013 calendar year. Even less of a secret is the fact that few leaders in the region seemed keen on making any sort of decisive moves in order to quell the ailing European economy.
Contrary to the last few month’s offering of news, this week has shed a positive light on Europe. Monday opened with the latest Purchasing Manager’s Index reading which came in above 50 for the first time in a long time. As you may or may not be aware, a reading above 50 indicates that the economy in question is growing as opposed to contracting. Even though the Euopean Central Bank announced that the 2013 year as a whole will likely be one of contraction for Europe, they went on to say that prospects for 2014 are already looking up.
Europe also saw reports of an increase in orders of delivered goods as well as industrial production in Germany this week. While these stories may be good for the average European, they were part of the reason gold and silver were facing a lot of selling pressure early in the week.
Confusing Comments from the Fed
The Federal Reserve has been a mainstay in the news lately due to the large quantity of speaking appearances it and its members are making.
Over the course of the last two or three weeks we have seen both Fed chairman, Ben Bernanke, and the FOMC as a whole make some fairly surprising remarks about the future of monetary policy in the United States. Though it was a widely accepted belief that QE would be done away with by the end of the 2013 calendar year, Bernanke and co. shot down that belief when they said that the government bond-buying program was on no preset course to being done away with.
These remarks helped give gold back some of its appeal as a safe-haven asset, though that prospect took a hit this week thanks to some remarks made by president of the Atlanta Federal Reserve bank, Dennis Lockhart.
Lockhart, in a short and vague statement, alluded to the fact that QE is still likely going to be done away with by the end of the year. This statement did well to hurt gold and silver spot values as well as the general public’s confidence in the Fed. No organization as trusted as the US Federal Reserve should be allowed to make such contradictory statements in such quick succession. Not only that, they should work their hardest to ensure that remarks made by high-ranking officials are in line with other, widely spread remarks.
Gold started the week around $1,313 and ended the week up only a few dollars at $1,315.
Silver, on the other hand, started the week at about $19.91 and ended at $20.62. This was an impressive gain of about 71 cents.
This market update is provided weekly with analysis. You can always check spot value of silver by watching our on-site charts.