January 29th Midweek Silver Market Update

Gold and silver are trading up during the first half of Wednesday ahead of the important post-policy meeting statement by the Fed. Markets and currencies ┬áthat seemed to be in free-fall on Monday have since stabilized but are at risk of having yet another poor run depending on the outcome of the FOMC meeting. As you might have expected, there is little to talk about besides what’s going on with the Fed. Gold and silver may finally be given the room to make bullish runs, but that too is mostly dependent on the outcome of the FOMC meeting.

Equities On the Verge of Collapse

The US marketplace is seeing yet another decently large sell-off today thanks, in large part, to the rising probability that the Fed will further reduce its monetary policy. The threat of less easy money circulating throughout the world marketplace is being taken very seriously by investors and is seen in the massive sell-offs of stocks we have seen in Europe, Asia, and the Americas over the course of the past week or so. Though stocks are looking like they may be falling into a bearish market, it must be said that over the past 5 years US equities have had fairly consistent, strong performances. Investors are now more readily seeking out safer assets which gives many people the reason to believe gold and silver’s time for gains may be right around the corner.

It isn’t only equities that are feeling the brunt of the Fed’s likely decision to taper QE by another $10 billion as currencies like the Turkish lira and the Indian rupee sold off at a rapid rate earlier this week. These currencies sold off so quickly that Turkey, India, and South Africa called emergency central bank meetings and raised their lending rates in order to fight off potential deflation.

Investors will likely hold their positions for the duration of the day or at least until the Fed makes their post-meeting statement.  Regardless of which way the Fed heads with their decision the rest of this week is going to be filled with a lot of activity.

Posted in Market News

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