Week of January 9th Gold Market Update

After beginning the week in impressive fashion, both gold and silver have cooled off a bit during the latter three days of the 5-day trading session.So far this week, we have seen a number of different happenings and have seen the attitudes of global investors shift significantly during such a short period of time. Though there was a good amount of economic data made public this week, very little of it had any major impact on the spot values of gold and silver.

As we look ahead to next week, the market will be dealt even more economic data. In addition to this, investors will also be concerning themselves with the upcoming central bank meetings in both Europe and the United States. The former is already catching a lot of attention, so I imagine that that will only intensify as the days pass.

Equity Market Volatility Makes Its Mark

When this week began, it was strange because equity markets around the world were trending downward, and in a lot of cases significantly so. The reason for this was a combination of a poor PMI reading from the European Union for December as well as general investor anxiety with regard to the strength of the global economy. With so many global economies in a rut at the present moment in time, it is no wonder that some investors were seen ditching risky equity investments for the relative safety provided by gold and silver. Though stock markets in the US and abroad have steadied a bit, there are still some lingering worries with regard to whether the bullish run on the part of equities might finally be coming to a close.

Some market experts are pointing to this week’s volatility coming so quickly after equity markets hit record highs as a reason behind why stocks may be ready for a more permanent tick downward. Though there is no saying for sure that equities will continue to perform poorly throughout the coming weeks, recent price action on the part of stocks has a lot of investors rightfully worried.

Dollar Remains Strong

One of the market themes that has really not changed this week is the stronger US Dollar. Since markets opened on Monday, the USD Index has performed extremely well. Now hovering near a 10-year high, the greenback is the preferred currency for currency traders. The Euro, on the other hand, has spent most of this week trending downward as a result of speculation regarding the upcoming European Central Bank meeting.

According to an overwhelming majority of the market, the ECB, at their upcoming meeting, is going to announce a major monetary policy shift. This shift, according to many, is said to be the introduction of a bond-buying initiative similar to the quantitative easing we have witnessed in the US for the last few years. Whether the ECB makes such an announcement remains to be seen, but the Euro currency has already taken a solid hit due to speculation alone.

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