Gold and silver did a lot of moving this week, though at the end of the week both metals finished in the same neighborhood as where they started. The beginning of the week saw gold and silver almost immediately lose a lot of value, while Wednesday and Thursday saw precious metals make even bigger gains than what they lost.
Syrian Crisis Over With?
Only about three weeks ago, the main piece of news on everybody’s mind was the potential for US military involvement in Syria. Because the Syrian government has supposedly violated international laws forbidding the use of chemical weapons, the United States government, namely President Obama, felt that military intervention was unavoidable. Despite the fact that a majority of US citizens were and still are against military intervention in Syria, Obama sought the approval of Congress anyway.
Thankfully, before the situation boiled over, Russia decided to come up with a sensible solution to the entire scenario. Russia, who is allies with Syria, suggested that the Syrian government turn over their chemical weapons to the international community. It seems as though Syria is going to cooperate with Russia and for the time being tensions have calmed down.
At the beginning of the week every investor was awaiting the Federal Reserve’s monthly policy meeting. This month’s meeting was of particular importance due to the fact that many investors were under the impression that monetary policy in the US would see a face lift of sorts. The currently employed monetary policy of Quantitative Easing works by allowing the government to buy $80+ billion worth of bonds each month. This $80+ billion being pumped into the economy each month works to devalue the US Dollar and thus make exports seem more inexpensive to foreign buyers. All of this translates into economic stimulation and hopefully an improved economy.
The expectation coming into this week was that QE would be reduced by $15 to $20 billion per month, though such ended up not being the case. The Fed and its members are convinced that the US economy is not as strong as many think it is, and for that reason they plan on continuing their current course of QE.
In the immediate aftermath of the FOMC meeting the spot values of precious metals soared, though in the following day or so the marketplace has seen a lot of profit-taking which has seen the spot values of gold and silver dip back down once again.
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