Gold and silver posted some minor gains on the last day of a fairly unpredictable week. After posting substantial gains over the first two days of the week, Wednesday and Thursday saw most of those gains be given right back. Friday saw precious metals spot values lifted once more, but only slightly for both gold and silver.

Next week’s FOMC policy meeting is on the top of every investor’s list of concerns, but this week’s bipartisan budget agreement is still causing a bit of a stir. Despite the large amount of speculation with regard to the timing of a QE reduction, more and more market experts are thinking that a tapering announcement will not end up having any sort of major impact on the precious metals market

Government Shutdown Averted

For many, the government shutdown that happened this past October seemed like a “once in a blue moon” type of event. The reality of the matter, however, was that up until a few days ago the US government was staring right in the face of yet another shutdown. What most of the American public doesn’t know is that the budget agreement reached by US lawmakers that ended the shutdown in October was only a temporary fix. The agreement was set to expire in early January, at which point another shutdown would ensue.

Luckily, Democrats and Republicans were able to put their differences aside to formulate a budget that is less of a win for one side or another and more of a win for the nation as a whole.

A budget deal being reached is of significance to precious metals investors because it means there is one less geopolitical question mark for investors to concern themselves with or be worried about. A calmer geopolitical environment typically translates into investors exhibiting more of a risk-on attitude; something that almost always translates into investor funds being moved away from precious metals and into stock market investments.

FOMC Policy Meeting and Possible Outcomes

Next week’s FOMC policy meeting has been one of the primary concerns for worldwide investors for the past few weeks. This is the case simply because the world marketplace is and has been obsessed with the timing of a reduction to Federal Reserve bond-buying, also known as Quantitative Easing.

In the past, it was thought that a tapering announcement would translate into a massive decline for the spot values of gold and silver. Now, many market experts think that because the marketplace is expecting to hear a tapering announcement sometime in the near future, it will not be as shocking when it actually happens. Some people are even going as far as to say that gold and silver spot values have already factored in a tapering announcement so it doesn’t matter if it is made next week or next month.

Regardless of how you feel about the prospect of QE tapering, there is no doubt that the majority of the world marketplace will be waiting to hear everything the FOMC has to say next week.