Gold and silver received no respite from their past two weeks of losses as more news adversarial to the outlook on precious metals is making its way to the public. Today we witnessed some weaker than expected Chinese economic data while the marketplace continues to digest the release of yesterday’s FOMC minutes. As of now, precious metals are in a bit of a slump with what looks to be little to no aid coming in the next few days. While lower prices will spur bargain-hunting buying, the technical bears still have momentum and will likely emit enough downward pressure to prevent gold and silver from making any positive gains.
FOMC Minutes Released Yesterday
Before this week even got underway there was only one thing on investors’ minds, and that was the release of the FOMC minutes. Because this December’s meeting is already being so hotly debated amongst investors, the release of the minutes was going to be a way of assessing how the FOMC feels about reducing monetary policy before the meeting actually takes place. While there were still some people hanging on to the notion that the FOMC will taper QE before the end of the year, a majority of the marketplace was convinced that current economic conditions will prevent the Fed from taking such action.
When the minutes were finally released late yesterday afternoon, what the FOMC had to say was a bit surprising. Not only did most members of the Open Market Committee agree that QE stands the possibility of being tapered at one of the next few meetings, they also mostly agreed on the notion that the US economy is showing moderate growth. When this news first hit the presses the spot values of gold and silver almost immediately declined. Of course, the minutes revealed nothing resembling a concrete plan with regard to reducing QE, but investors are interpreting the minutes as meaning that we will see QE reduced either in December or in the early stages of next year. Regardless of when investors think QE will be tapered the reality of the matter is that none of them no any better than the rest of them; at this point anything investors say with regard to QE’s tapering is mere speculation and nothing more.