Gold and silver have gotten the New Year off to a particularly poor start as they are both conceding decent value on the final day of this trading week. In all reality, metals losing value should be none too surprising simply because the Dollar is on such a hot streak. Essentially, as the Dollar continues to gain against its many rivals, the poorer gold and silver will perform. This much is true more often than not, and is especially true in recent weeks.
As we head deeper into this New Year, there is a very good possibility that metals will continue conceding value. With crude oil still feeling pressure, there are very few factors available to come to the aid of gold and silver. With all of this said, however, anything can happen and just because gold and silver are down today does not mean they will be down tomorrow.
Gold and Silver Say Farewell to Dismal 2014
Now that we have officially advanced into the New Year, it only makes sense that we reflect on the year that has just gone by. For gold and silver, the past 12 months have been a long, inconsistent ride that has seen spot values surge upward just as quickly as they have surged downward. When all was said and done, both gold and silver finished the year having recorded losses. The reasons for metals’ collective losses are many in number, and most of these factors are continuing to drag spot values down.
In recent weeks, it has been a combination of stronger stocks/USD and a declining crude oil spot price that have really weighed on metals. Though we have entered a new year, the reality of the matter is that the same pressures are going to continue having a negative impact on spot values. You can change your calendar, but the truth is that you cannot simply change how the market feels about certain asset classes.
Perhaps, with some luck, the economic data that will be released in the coming days and weeks will come to the aid of gold and silver. To the contrary, the pending economic data we will be receiving from the US, Europe, and elsewhere around the world may very well put even more pressure on gold and silver. If, for example, US economic data is upbeat while Europe’s is poor, gold and silver may suffer considerably. The reason for this is that poor data from Europe and upbeat data from the US suggests to investors that EU and US monetary policy will continue to diverge. With higher interest rates expected in the near future in the US, it is hard to envision a marketplace that will be overly bullish on metals.