The spot values of gold and silver have opened up the day on Thursday in impressive fashion and are really benefitting from the dovish nature of Janet Yellen’s comments a day ago. As you probably could have guessed, the biggest and most noteworthy happening this week came yesterday in the form of the conclusion of the Federal Open Market Committee’s most recent policy meeting. Though the meeting wasn’t expected to emit any policy changes, and didn’t, investors tuned in hoping to get a clearer picture regarding the future of interest rates in the US.
In other news this week, investors and market analysts are keeping a close eye on what is currently happening in Russia. The ruble has recently been in free-fall, and with Western sanctions and falling crude oil prices added to that, the Russian economy is faring quite poorly as of late. It will be interesting to see, over the course of the coming weeks, just what Putin and the rest of his colleagues do to help their failing economic system.
FOMC Stays Dovish, Again
Any time the FOMC convenes for their monthly policy meeting, you can expect that it will derive a good bit of attention from investors from the US and around the world. In recent months, that has been especially true due to the fact that most investors and market-watchers are expecting interest rate hikes to take place in the United States for the first time in many years. That being said, we are now in month 6 of interest rate hikes being expected, and at this point we are no closer to knowing when rate hikes will take place than we were 4 months ago.
Investors were so concerned with this FOMC meeting in particular because it became widely believed, over the course of the past week or so, that the FOMC would be announcing some sort of timeline with regard to rate hikes. Of course, when the meeting finally did come to an end on Wednesday afternoon, the Fed had very little new information to offer.
Instead, investors were greeted by the same “considerable time” language that Yellen has been saying for months now. As a result of the more dovish nature of Yellen’s comments to the news media, US stocks surged out of their recent slump and made impressive intraday gains on Wednesday. Those gains are being added to nicely as of the writing of this post on Thursday, and are making it look like equities have completely turned this week around.
US stocks aren’t the only beneficiaries of yesterday’s more dovish comments from Yellen, as both gold and silver are adding value early Thursday morning as well. Now, the real test becomes to see whether gold and silver can hang on to these gains or perhaps even build upon them as we close out the week, or if spot values will move back downward before things are all said and done.