January 2nd Weekly Silver Market Update

Gold and silver posted decent gains on the first day of trading in 2014. Though the marketplace was still quieter than normal it was clear to see that many investors were making their way back from holiday vacations. Friday is not expected to emit any major economic or geopolitical events, but investors and market watchers alike will be interested to see if precious metals can build upon today’s gains or not.

Portfolio rebalancing is being credited with giving gold and silver their ideal start to the new year. Looking ahead, the marketplace will soon have to pay more attention to the geopolitical atmosphere in the United States as it will likely have some sort of impact on the precious metals market.

The Year Ahead and Possible Implications for Precious Metals

Now that we have finally made it to 2014, it comes time to think about what the future holds for gold and silver. If you can remember the government shutdown back in October, you probably also remember that US lawmakers were concerned with finding solutions to both the fiscal year budget as well as the debt ceiling, or borrowing limit. While the budget deal was finalized a few weeks ago, the temporary deal with regard to the debt ceiling is set to expire in early February. Though we are just about a month away from the deadline, each and every passing day where a deal is not reached will raise the level of concern exhibited by investors and market watchers.

With regard to 2014′s larger picture, the possibility of further Federal Reserve tapering measures is going to constantly loom throughout the year. Though the Fed reduced Quantitative Easing by $10 billion monthly beginning this month, many people are convinced that more tapering will occur incrementally throughout 2014. If additional tapering measures act at all like the one we just witnessed, gold and silver may not fare entirely well throughout the year.

Next week is likely going to be a busy one as a boatload of economic data is expected to be released. Next week will also be the first full week of 2014 when traders and investors are back in full force which means that for the first time in about three weeks we will be in the midst of a normal trading atmosphere.

Posted in News

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