November 20th Midweek Silver Market Update

Gold and silver have not received any sort of break from their respective declines as they are now hitting 5-week lows. With few inputs in general, and even fewer able to aid the outlook on precious metals, gold and silver need a lifeline thrown to them. Lucky for precious metals investors, however, the FOMC is releasing their latest minutes today while president of the St. Louis Federal Reserve bank, James Bullard, is scheduled to make a speech that will almost certainly focus entirely on monetary policy in the US and its unclear future.

Apart from Bullard’s speech and the release of the minutes there are a few economic reports due out today, though they will likely be overshadowed by the plethora of Fed activity.

FOMC Minutes, Bullard’s Speech

Just so everyone is on the same page, the Federal Open Market Committee, often referred to as the FOMC, is the branch of the US Federal Reserve tasked with developing and maintaining monetary policy. What this branch has to say about monetary policy becomes law and for this reason investors are always interested in any news coming from the Fed or FOMC. Today, the FOMC’s latest meeting’s minutes are due out and what they have to say is of particular importance to investors. The reason this is so is because investors are hoping to find out more about the future of monetary policy so that they will be able to make more confident investing decisions moving forward. More information about the future of monetary policy in the US is exactly what investors are hoping for too, though if the past is any indication of what will take place today, it is unlikely that the minutes will yield anything resembling a clear picture with regard to Quantitative Easing’s future.

If such is the case and the FOMC minutes do not offer any insight into what will happen to QE a few months down the road, investors will likely interpret this as the Fed saying that Quantitative Easing will be kept around until sometime next year. Such an interpretation would likely bode well for precious metals who have been the victim of the pervasive belief that QE will be tapered before the end of 2013.

In addition to focusing on the FOMC minutes and everything they have to say, investors are also going to be cognizant of Mr. Bullard’s speech today. As president of the Federal Reserve bank of St. Louis, James Bullard’s words are the next best thing to commentary from the FOMC itself. At this point it is unclear what Mr. Bullard will talk about, but all bets are being placed on his speech centering around why Quantitative Easing needs to be retained in the United States. Having been a publicized supporter of QE in the past it is unlikely that today will see Mr. Bullard altering his stance on Quantitative Easing and its positive effects for the US economy.

Posted in Market News

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