Gold and silver investors will want to quickly forget this week as precious metals spot values took a turn for the worse. This week, while shortened by the Memorial Day holiday being celebrated on Monday, saw gold prices decline on each and every day as the yellow metal suffered its worst weekly loss in 8 months. Now, on Friday, gold is sitting below $1,250 while silver has finally fallen below $19/ounce.

Market bears were able to so easily take control of the market this week due to the fact that there have been little to no bullish fundamental inputs making their way to the market. The situation in Ukraine is calming down, European monetary stimulus seems to be on the horizon, and precious metals are feeling the brunt of it all. What’s more, risk appetite is and has been on the rise this week, something that is almost always going to work against the spot values of precious metals.

Investors Hold Positions Ahead of ECB Meeting

What little data this week yielded was mostly in the favor of the precious metals bears. Even though the US’ 1st quarter preliminary GDP took a bit of a hit, spot values were still feeling a good bit of pressure throughout a majority of the week.

As a result of this week’s quieter nature, gold and silver were forced to wait things out and roll with the punches. Towards the end of the week, investors were seen mostly holding their positions as the investing world anxiously awaits next week’s European Central Bank policy meeting. As it stands, a majority of the investing world is convinced that the European Central Bank will announce some sort of new monetary stimulus as a result of their meeting next week. Deflationary pressures have been a problem for much of Europe over the course of the past half year or so, and stimulus measures are more or less being seen as inevitable.

Normally, talk of monetary inflation anywhere in the world would give gold and silver spot values a boost. Now, however, it is more than likely that the opposite will happen should the ECB actually announce a new monetary stimulus plan. The reason for this is simple, new monetary stimulus in Europe will drive the value of the euro currency down, when the euro is driven down, the US Dollar will have more than enough room to make significant strides forward. And, as is almost always the case, a stronger US Dollar will make it almost impossible for metals to make any real gains.