Gold and silver both posted substantial gains on Wednesday thanks to bargain-hunters being out in full force. A day after gold descended to another 5-month low, bargain hunters hit the marketplace in search of deals on precious metals which many feel have hit the bottom of the market. For many, today was the last quiet day before the busy rest of the week. As we look ahead to the latter stages of the week, investors will be greeted with some US jobs data, a US GDP report, and a European Central Bank policy meeting. Any number of these reports and events stands the chance of altering the spot values of gold and silver in one way or another.
With the December FOMC meeting just around the corner, investors the world over will be latching onto and over analyzing every piece of economic data from the United States.\
A Day of Respite
Wednesday’s isolated gains made by gold and silver were a welcomed day of respite by investors. For the past few weeks gold and silver have done little else besides decline in value, and now that many feel both metals are towards the bottom of their respective markets bargain hunters came out in full force. The extremely low price of gold and silver currently is prompting people to purchase the metals for their Christmas gifts or simply to get a perceived deal on precious metals.
With tomorrow’s GDP report and ECB meeting likely to be taking up most of the headlines, it will be interesting to see if the bargain hunting persists through the latter stages of the week. Common sense tells us that a sustained run by gold and silver in this economic atmosphere will be almost impossible. Not only have most economic reports out of the US of late been positive, but the notion that the Fed will reduce their Quantitative Easing initiative before the end of the year is also gaining strength. Though we will have to wait until the FOMC’s policy meeting toward the end of the month to find out any concrete information with regard to QE’s tapering, many are labeling this month as the month it finally happens.
Nonetheless it will be important for investors of all walks of life to pay close attention to any and all economic data released in the coming weeks. Starting tomorrow, the rest of this week is shaping up to be much busier than the early parts of this week.