For a third consecutive week, it seems as though precious metals are headed for a weekly loss. Though things started out quietly through Monday and Tuesday, the week really got into gear on Wednesday upon the conclusion of the latest Federal Open Market Committee meeting. It was at this point that precious metals really began losing their already shaky foothold.
On the geopolitical front, things remained mostly quiet all week long. The ceasefire agreement reached between pro-Russian rebels and Ukrainian military forces appears to still be holding, while US-led efforts against ISIS only seem to just be getting underway. Despite US president Barack Obama’s insistence that the United States’ involvement in the Middle East will be limited to only air strikes, some questions have been raised this week. Some of Obama’s military personnel were quoted, alluding that the use of US ground troops is not out of the question just yet. This news obviously caught the attention of the world, and will be interesting to analyze over the course of the next few weeks and months.
FOMC Meeting Brings About Few Surprises
The biggest event of this week from an economic standpoint was always going to be the latest meeting of the Federal Reserve Open Market Committee. With talk of interest rate hikes the number one obsession of most investors nowadays, it was the hope of many that the FOMC would unveil more information pertaining to when and by how much interest rates would be raised.
Unfortunately, the result of the FOMC meeting was mostly anticlimactic and did little in the way of providing any fresh information regarding raised interest rates. Instead, members of the Fed reiterated that the US economy still has plenty of room for improvement and that there is still “considerable time” between now and when interest rates are raised. While this was all fine and good, investors did react to two FOMC members dissenting to the statement made by the Fed. Their dissenting basically means that they disagree with the way in which the Federal Reserve is approaching the raising of interest rates.
As a result of this, US equities and the US Dollar came out winners. Because we now know that interest rates are not going to be risen anytime soon, investors reverted back to the bullish US equity markets. On the other hand, the US Dollar was given a boost not only because interest rates are in the future, but because the dissenting of two Fed members makes some people think that the interest rate hikes might be coming sooner rather than later. In all, however, no one really has any concrete idea when changes will be made to interest rates in the United States.
Scottish Referendum Fails
Another big event taking place this week came yesterday in the form of a Scottish referendum vote on independence. The vote was simple and asked whether the voter supported an independent Scotland or if they would prefer Scotland to remain a part of the UK. As you could imagine, there was much more to the vote than that, but the Yes or No answer was all one was able to submit.
As of the writing of this post, it seems as though the referendum failed, even if by only a marginal number of votes. As the rest of the day and weekend play out, I am sure we will hear further information pertaining to Scotland’s latest chance at breaking away from the United Kingdom.