Despite this week being inordinately quiet as far as economic data is concerned, gold and silver have been able to post 5 consecutive days of solid gains. As it stands currently, gold is on the verge of pushing past the $1,320 resistance level while silver is well over the $21 mark. A weaker US Dollar is definitely helping precious metals surge forward, though that is not the only bullish factor working in gold and silver’s favor.
Apart from gold and silver’s solid weekly gains, there really isn’t and hasn’t been too much for investors to discuss this week. Though the newly appointed Fed chairperson made her inaugural address to Congress earlier in the week, the outcome of her remarks ended up not having any major impact on the markets.
Stocks Trading Down After Late Week Surge
US equities have begun the day at a slow pace, dropping yesterday’s gains almost immediately after markets opened for trading. On Wednesday and Thursday the marketplace was surprised to see most major US equities posting gains, and solid gains too. While this price action caused some investors to abandon the notion that US equities are running out of gas, most others believed that this was one last gasp for air before the equity markets in the US corrected themselves lower.
Perhaps even more surprising than the fact that US equities posted some solid gains this week is that those gains did nothing in the way of putting downward pressure on metals. Typically, when equity markets have strong performances, the spot values of gold and silver tank. This time, however, gold and silver were still able to manage positive daily performances on Wednesday and Thursday in the wake of solid stock market gains. Because metals were performing so well directly in the face of surging stocks, many investors are curious to see how gold and silver will fare once they are given some economic data or news that is bullish.
As it stands, the gold and silver bulls have the clear-cut near-term momentum and will be looking to carry it into next week.
Also helping the fortunes of precious metals today is a slightly depressed US Dollar. In fact, the US Dollar has been seemingly under performing all week in comparison to rival currencies such as the GBP. Next week will prove to be a pivotal one for precious metals as it is quickly becoming a true test of whether they can sustain recent gains or if profit-taking will prompt a price correction at or below the $1,300 threshold.