January 28th Midweek Silver Market Update

Precious metals are posting mixed results as of the writing of this post early Wednesday afternoon, but have not ventured too far in any single direction. So far, this week has been generally quiet with the exception of some corporate earnings reports that quite honestly took the market by surprise.

For those who missed it, last week’s European Central Bank meeting saw the ECB introduce their bond-buying plan for the region. Though the ECB will not actually put the QE plans into action until early 2016, the announcement itself was welcomed with open arms by investors of all types. What was shocking, however, was that the ECB decided to implement 60 billion euros worth of bond purchases every month. Prior to the announcement, most investors were expecting to hear of a 50 billion euro plan, so the 60 billion euro announcement was surprising.

Corporate Earnings Fall Short of Expectations

This week has been much quieter than the last few, but there were plenty of corporate earnings reports due out throughout the first half of the week. Unfortunately, 2014 fourth quarter earnings reports have been far weaker than expected and have taken their toll on US equity markets. Generally speaking, equity markets have seen a lot of volatility recently and this has been keeping investors on edge.

As far as particular reports go, Caterpillar was a noted under-performer, having reported profits that were far short of what was expected. Citing a downturn in the mining industry, Cat said that orders for construction equipment are not coming in as readily as originally believed they would.

For Proctor and Gamble, a stronger US Dollar in recent months has translated into overseas earnings being devalued. This means that while the company is still performing well, its bottom line is being hurt by a continuously stronger US Dollar. For gold and silver, the fact that fourth quarter earnings from 2014 have been weaker than expected is translating into stronger safe-haven demand. In recent months, general demand for gold and silver has picked up and has seen spot values pulled up right along with it. Should the same sort of uncertainty continue to be present throughout the global marketplace, gold and silver will likely continue to benefit.

In other news this week, the Federal Open Market Committee is holding their monthly policy meeting for the month of January. Unfortunately, the FOMC meeting did not bring about any shift in policy and was so uneventful a post-meeting press conference did not occur. It is now generally agreed upon that interest rates here in the US will remain put throughout the 2015 calendar year.

Posted in Market News

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