Gold and silver started the day on Thursday trading down a bit and giving back all of yesterday’s gains and then some. There are a few talking points emerging out of Asia, specifically in Japan and China. We focus in on a Federal Open Market Committee meeting in the US next week as well as the fear that investors all over the world have been having lately, that of the end of easy money policies around the world. Gold and silver have moved around quite a bit, but as we open the day on Thursday both metals are more or less in the same position they were in when the week started. With few major news stories to talk about today and tomorrow, investors will be speculating in full force about the future of easy money around the world as well as the future of certain world economies.
World Investors Fear End of Easy Money
The world marketplace has been in a state of flux over the past few months, and all of this volatility is heightened due to the fact that easy monetary policies currently being employed by central banks around the world might be coming to an end sometime soon. This week investors have been doing anything and everything they possibly can to avoid risk, which has been seen in rising bond yields across Europe and the United States. The fact that Asian stock markets are declining and mid-level Asian currencies are being dumped by investors is yet another sign that the end of easy money may be forthcoming.
Next week the US Federal Open Market Committee is set to meet on Wednesday where they will discuss their current policies as well as where they might want to head in the near future. This meeting will undoubtedly be one of the main, and only, topics of discussion for next week.
Asian Markets in Distress
No more than 5 weeks ago we saw the Japanese Nikkei Index hit record high points, giving investors large returns on their investments, so long as those investments were made at opportune times. Here we are today, and on Thursday alone we have witnessed a 6% decline of the Nikkei Index from last month’s record highs. All in all, the Nikkei Index has lost over 20% of its value from its impressive run a month ago. It is safe to say that very few anticipated this large of a decline following such an impressive periods of gains. In addition to this the Japanese Yen has made some decent gains against the US Dollar, something it has not done much of recently.
After the Chinese took the day off yesterday in order to honor a public holiday, their Shanghai stock index immediately fell to a half-year low on Thursday. Going hand in hand with this news is the fact that European stock markets are also posting disappointing numbers which means that US stocks likely will do the same.
Closing Out the Week
There are very few major news stories to fixate our attention on for the end of this week, which means that people will undoubtedly be looking forward to next week’s FOMC meeting. It is not a guarantee that big news will be released in the wake of their meeting, but I am sure that will not stop investors from the heavy bouts of speculation.