Gold and silver are continuing to build upon early week gains, despite a lack of major fundamental inputs penetrating the marketplace. For the first time in months precious metals are seeing the near-term momentum swing in their favor. Also increasing investor interest in precious metals is the fact that gold has finally crossed over the $1,300 threshold and is looking like it will stay above. All of this week’s gains, which have been consistent, are happening despite a rally being made by US equities.
Even though stocks are rallying this week, market experts like Jim Wyckoff from Kitco think that this is one last hoorah for equities before declining once more.
Disappointing US Economic Data…Kind Of
This week is a particularly quiet one due to the fact that the US is not releasing any major pieces of economic data. Though pieces of information like the weekly jobless claims report and retail sales data from January will catch the attention of investors, it is unlikely that either will have any real impact on precious metals. With that being said, it is worth noting that today’s retail sales report for January came back weaker than the market expected. This news did not have much of an impact on the market, but it did add to the momentum currently exhibited by precious metals.
Should dismal economic data continue to be a mainstay in the United States, the investing world will only grow more confident in their belief that the Fed will be forced to cut back on its tapering plans. As of now, most are expecting that the FOMC will not decrease Quantitative Easing even further at their next meeting. Up to now, the Fed has reduced its monthly bond-buying initiative by a total of $20 billion.
Newly appointed Federal Reserve chairperson Janet Yellen made her inaugural address to Congress earlier this week, something that was of great importance to those interested in what the Fed thinks about the current state of the US economy. Though most Fed members reiterated their confidence in US economic performance, they also made it clear that the Fed is in no way in a rush to get rid of the easy money we have gotten used to over the past few years.