Gold and silver fared a bit better this week than they have in the past few weeks, thanks in large part to a quieter trading atmosphere. Because Christmas fell right in the middle of the week on Wednesday it was always going to be a week of thin trading volumes. While gold and silver managed some minor gains this week, US stocks continued their stellar performance that has now lasted more than two weeks.

Next week will be very similar to this one as the New Years holiday is scheduled for the middle of the 5-day session. As we bring this year to a close, investors will be assessing their positions as well as the moves they should be making in the early stages of 2014.

The Holiday Put A Damper On Trading

Monday of this week was the only day where we saw anything near normal trading volumes, and even then things were quieter and slower than usual. Most economic data out of the US and Europe ceased and with most people away visiting families or simply relaxing prior to the holidays, there really wasn’t much going on.

One thing that was made clear this week was that investor risk-appetite is still at an all-time high. Monday and Tuesday saw stocks continue to post gains and it began to seem like there was not a single investor out there interested in anything other than stocks.

Gold managed to pick itself up and eclipse the $1,200 threshold, but it is still flirting with danger in that regard. While precious metals were able to make gains this week it is hard to tell whether that is because we are seeing a renewed interest in safe-haven assets or if the gains were nothing more than a fluke outcome of what was an unusual week of trading.

Looking ahead to 2014 is a tricky thing to do at the present moment simply because it is impossible to tell what the future has in store for gold and silver. While there is a strong contingent of people on one side who thinks that the possibility of more QE tapering is bad for precious metals, the other side of the coin sees a boatload of fiscal problems and a potentially poor performing economy as a reason why 2014 may be a great year for metals. Nonetheless it is important that investors speculate about 2014 as they make their final investing move before the end of the year.

Gold and silver suffered significant losses this week thanks to the Federal Reserve of the United States finally announcing that it will begin tapering Quantitative Easing. For those of you who do not know, Quantitative Easing, or QE, is the US government’s monthly purchase of bonds as part of an effort to stimulate economic growth.

Because tapering was finally made official, gold and silver markets have lost almost all of their appeal as investors are becoming more hungry for risks as opposed to the safe-haven qualities exhibited by precious metals. Thursday was the biggest day of losses this week as gold sunk to a 6-month low and fell underneath $1,200 for the first time in a long time. Gold and silver have since recovered, but only slightly as they have posted modest gains so far on Friday.

FOMC Announces Tapering

Receiving more attention than any other piece of news combined this week was the FOMC policy meeting that took place from Tuesday morning until Wednesday afternoon. The marketplace was abuzz with speculation with regard to whether the Fed will actually taper and, if they do, how severe will QE’s reduction be.

All the speculators across the market got their answer on Wednesday afternoon when Ben Bernanke announced that the FOMC decided to taper monthly bond purchases by about $10 billion, starting in January. The $10 billion reduction is actually two $5 billion reductions combined as the Fed will reduce treasury bond purchases by $5 billion and mortgage-backed securities purchases by the same margin. In the immediate aftermath of the Fed’s decision gold and silver did not fare terribly like so many had thought, but rather made some minor gains. When markets opened the day on Thursday, however, gold and silver were part of a different story. Almost immediately, both gold and silver suffered losses while US stocks and the USD were seeing extreme gains. The rest of Thursday panned out much like the morning did and by the time all was said and done gold lost over $40 while silver lost almost a whole dollar.

Things have since corrected themselves a bit on Friday, but gold and silver is about as unappealing to investors as it has ever been. Investors in both the US and around the world are seeing the Fed’s reduction to QE as well as a calmer, more secure US economy as a reason to take bigger risks with their investing funds. When investors are more keen on taking on risk, their interest in gold and silver drops off almost completely. While selling pressure is still very heavy, gold and silver may be able to make up some of their losses before the week is through.

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.

Gold and silver continued along their two-day decline on Friday as November’s jobs data came in better than market expectations. Now, after a week of upbeat US economic data, investors will be fueled up and ready to speculate with regard to the exact timing of Quantitative Easing tapering.

Though precious metals did not decline nearly as much on Friday as they did a day ago, the downward pressure being levied against gold and silver is still very much apparent. As we move ever closer to the December FOMC meeting, scheduled for the 16th of the month, investors will be in constant debate whether QE will be wound down this time around or not.

November Jobs Data

While there were plenty of economic happenings going on both in the US and around the world this week, no piece of economic data was valued by investors more highly than today’s employment report for November. Though market expectations were that closer to 175,000 non-farm payrolls were added in November, actual figures showed that over 200,000 payrolls were added. If you are looking for an exact number, the US Labor Department tallied the total non-farm payroll growth in November to be 204,000. This dropped the unemployment rate to an even 7%, its lowest point since 2008.

The market immediately responded to the better than expected jobs data by ridding themselves of their precious metals holdings as well as their risk-averse attitudes. In the immediate wake of November’s jobs data gold fell to a new 5-month low, but that dip was short-lived due to a large number of bargain-hunters hitting the market.

With this month’s FOMC policy meeting less than two weeks away, it is crunch time for investors who have been speculating over the possible timing of QE tapering for the past half year. Even though the possibility of tapering was present at the last 3 or four FOMC meetings, this meeting has a different feel about it. Proponents of a more immediate tapering will say that recent economic data is indicative of the overall strength of the US economy, while adversaries to immediate tapering will look at the upcoming budget and debt ceiling deadlines as reasons not to taper. Regardless of the speculation, however, we will find out much more about the future of monetary policy in the United States a week from this upcoming Monday.

Gold and silver are performing a bit better on Friday, but not by much. As most Americans are either participating in the Black Friday shopping holiday or simply recovering from yesterday’s activities, Friday is expected to be a quiet day. Despite that, the speculation with regard to the upcoming December FOMC meeting will begin to pick up.

The only news worth mentioning on Friday is with regard to an unemployment report out of Europe, which came in better than expected.

EU Unemployment Report

While most Americans are preoccupied by the holidays this week, Europeans are still in the office on the final trading day of November. In the early morning hours of Friday it was reported that the EU unemployment rate fell from 10.2% in September to 10.1% in October, on an annualized basis. Though this is not the largest of declines, any improvement to employment in Europe will be taken as a positive by most markets.

In additional news out of Europe, EU inflation rose from .7% to .9% from October to November. The rise in European inflation has, at least temporarily, quelled fears that the EU may fall into a deep period of deflation. We will continue to monitor the EU for any and all signs of economic growth.

As we bring a dismal November to a close, it is time to reflect on how truly bad this month was for precious metals. Since the end of October, gold has lost over $100 while silver lost over $3; both significant losses. Now, with market bears still very much in control of the precious metals market, the outlook on gold and silver is growing bleaker and bleaker. Investors will be looking forward to the December FOMC meeting, at which point they hope to hear a more definite announcement with regard to the future of Quantitative Easing in the United States. Like every other time the FOMC meets, investors will be expecting Quantitative Easing to be tapered immediately or within the immediate future. It is unclear whether or not QE will be tapered at this upcoming meeting, though investors will speculate endlessly nonetheless.

Gold and silver suffered hefty losses for the second consecutive week as the only major news stories of the week ended up working against precious metals. First was the more bearish than expected FOMC minutes which were quickly followed by a disappointing preliminary manufacturing report out of China.

Despite the fact that next week will be a slow one due to Americans gearing up for the Thanksgiving day holiday, you can expect the speculation with regard to the future of monetary policy in the US to rage on.

FOMC Minutes

The main piece of information on every investor’s mind this week was the release of the latest Federal Open Market Committee minutes. These minutes are of particular interest to investors simply due to the fact that the marketplace has been divided with regard to when people think Quantitative Easing will begin to be tapered by the Federal Reserve. While there was a strong contingent who believed that Quantitative Easing would not be touched until sometime in the latter stages of 2014, there were also plenty of investors and market experts who were confident that QE would be wound down sometime in the near future.

The latter of those two sides got their way this week as the FOMC minutes showed a committee who was mostly in favor of a more immediate tapering of QE. Not only that, but many members of the FOMC also agreed that the rate of US economic growth has been and continues to be “moderate.” Though the minutes were indicative of a Fed who wants to see QE tapered sometime soon, the minutes offered no concrete timetable for when QE would be wound down. Despite this, gold and silver almost immediately sunk to their lowest points of the entire five day session. Now, with the December FOMC meeting looming, investors will more than likely ramp up the monetary policy talk. Next week will be a slow one due to Americans focusing on the Thanksgiving day holiday, but the speculation with regard to QE will undoubtedly be continued.

Gold and silver are declining once more on Friday after isolated gains were made only a day ago. All in all, the past week or so has been pretty harsh on precious metals. This week did not emit any major or shocking news stories, but rather saw investors focus heavily on last week’s plethora of data.

Now, with November halfway completed, the marketplace has turned its attention to the possibility of the Fed reducing monetary policy before the year’s end.

Strong Economic Data, Dovish Statements

As is typically the case, stronger economic data out of the United States has caused the US Dollar to rise rapidly at the expense of the euro currency and precious metals. Since the beginning of last week, improved GDP readings and strong employment reports have been a mainstay in the United States. All of this positive economic data has hurt gold and silver, but both metals experienced a bit of respite only a day ago.

Janet Yellen may be a name you are unfamiliar with now, but seeing as she is the running favorite to replace Ben Bernanke as Federal Reserve chairperson that will all change soon. On Wednesday of this week she was scheduled to give a prepared statement to the US Congressional Banking Committee and what she had to say surprised some people. In her statement Ms. Yellen made it clear that if she was granted the position of Fed chairwoman she would retain all of Bernanke’s current monetary policies. She explained that the US economy is still not reaching its full potential while also saying that the unemployment rate still has room to decline further. Both of these reasons are strong enough for her to see the retention of Quantitative Easing as a necessary move.

Her sentiments were the same a day later when she was questioned by some of the United States’ congressional leaders. Her statements were perceived as being dovish to gold and silver and ushered in a day of modest gains yesterday. Unfortunately, however, the gold and silver bears are still in control of the market, seen in the refreshed decline gold and silver experienced as soon as the market opened on Friday.

In other news, a weaker than expected 3rd quarter GDP reading for the EU makes last week’s ECB decision to cut Europe’s key lending rate look like the best possible move that could have been made. We will continue to monitor European economic activity in an effort to see if the newly lowered lending rate will translate into economic growth like so many hope.

Gold and silver lost significant value this week as the European Central Bank meeting came to a somewhat shocking conclusion. Putting even more pressure on gold and silver was the string of extremely positive economic data released this week. As the US Dollar continues to gain value against the euro currency, gold and silver will have a very tough time making any positive gains.

ECB Meeting and Outcome

As is the case whenever the FOMC meets, speculation abounded in the lead-up to the European Central Bank meeting, which was scheduled to take place on Thursday. A week or so ago, many believed that the ECB would slash its key lending rate in an effort to spur otherwise stagnant economic growth. However, as the ECB meeting approached many investors and market experts began to believe that a shift in European monetary policy was unlikely.

For this reason, it was somewhat surprising when the ECB announced that it would slash its key lending rate by .25%. The new rate, which stands at .25%, caused the euro currency to decline while the US Dollar made substantial gains. As is the case anytime the USD makes substantial gains, heavy downward pressure was placed on gold and silver for the last two days of the week. Having dropped below the $1,300 mark for the first time in 3 weeks, gold is likely going to have trouble gaining anything substantial back in the early running of next week.

US Economic Data

Investors awaited both the 3rd quarter annualized GDP report as well as October’s employment report this week. First up was the GDP report for the third quarter, which showed that the US’ GDP had grown by 2.8% on an annual basis. This was much better than market expectations of a 2%-2.5% rise.

October’s employment report was even better than the GDP report, as figures came in twice as good as what was expected. Compared to a market expectation of a rise in non-farm payrolls of 120,000, the employment report showed that non-farm payrolls rose by over 200,000. This news strengthened the growing belief that the Federal Reserve may taper QE before the end of the year.

Precious metals made it through the first few days of the week without moving too much at all. As investors were focused on the latest Federal Reserve Open Market Committee meeting through Tuesday and Wednesday. Though no changes were made to monetary policies in the US, what the Fed had to say in their post-meeting statement effectively destroyed gold and silver’s combined hopes of making this week a positive one.

Also in the news this week were plenty of US economic reports, of which had mixed results.

FOMC Meeting and Outcome

As is the case every time the FOMC convenes for a meeting, the world marketplace took their attention off of other matters and focused solely on what the monetary policy-making body of the United States had to say. The meeting kicked off Tuesday morning and lasted until the afternoon on Wednesday. As was expected, the FOMC decided to leave monetary policy unchanged for yet another meeting.

The current monetary policy in the United States, also known as Quantitative Easing, has been in place for the past few years now. The policy functions by having the Fed buy over $80 billion in assets each month in order to add cash to the economy. Thanks to the recent government shutdown, the widely held belief that QE would be wound down or reduced by the year’s end dissipated quickly. However, the Fed’s statement which was released after meeting’s end might have changed that belief one more time.

The Fed stated that while the US economy is not strong enough to merit a reduction or abandonment of QE, it is still showing plenty of signs of growth. This seemingly optimistic outlook on the state of the US economy caused the marketplace to believe, once more, that the Fed may taper QE before the year’s end. Some where so quick to jump to conclusions that they marked the FOMC’s December meeting as a likely time when QE will be reduced. At this point though, anything investors and market watchers have to say regarding QE’s future is pure speculation.

US Economic Data

While there were a number of economic reports released over the past 5 days, no two were more important than October’s employment report and this week’s jobless claims report. The better of the two, the jobless claims report, came out on Thursday and indicated that unemployment claims across the US fell by about 10,000. October’s employment report, on the other hand, showed that non-farm payrolls rose by 20,000 less than what was expected. Though the market was anticipating non-farm payrolls to rise by 150,000, actual figures came in closer to 130,000.

Gold and silver had positive weeks, though neither metal took part in any major movements. Chinese economic data as well as rising interest rates have caught the attention of investors this week as both stand the chance of pushing gold and silver spot values in one direction or another.

Now that the US government shutdown has officially passed, it comes time for all of the delayed economic reports to make their way out. The first of these reports was September’s jobs data, of which was weaker than expected. Though this data was taken into consideration by investors, the fact that it was more than two weeks delayed means people will only dwell on it for a short period of time.

China In the News

China made its way into the world economic spotlight for the first time in a few weeks thanks to rising short-term interest rates and on overheating housing market. The rising interest rates in China were of particular interest to investors because of the possible implications they have for precious metals. The growing belief holds that if short-term Chinese interest rates continue to rise, Chinese monetary officials will be forced to tighten their current policies. Any type of tightening to Chinese monetary policies will almost assuredly result in the decline of Chinese consumer demand. Seeing as the Asian giant is the world’s second-largest economy and a huge consumer of precious metals, any decline in their nation’s aggregate demand will not bode well for the spot values of precious metals.

China also made the news this week in the form of an increase in their nation’s manufacturing PMI. October’s reading jumped almost a whole point when compared to September’s which is a good sign that the Chinese economy is hitting on all cylinders at the moment. This news was a bullish underlying factor for precious metals. Finally, with the Asian holiday season soon to be upon us, it is expected that demand for gold will increase.

Dollar Declining Steadily

Ever since the government shutdown started at the beginning of the month, the US Dollar has had a difficult time doing anything other than decline. With many underlying factors pointing in the direction of a battered US economy, the near future is not looking positive for the greenback.

The euro, on the other hand, has been doing well thanks to the declining US Dollar. Despite some poor economic data being released in the latter stages of the week, the euro is still hovering at an almost 2-year high.