Gold and silver are seeing safe-haven demand pick up all across the globe and simultaneously seeing their respective spot values rise to levels not seen in a few months. Yesterday’s big news centered around Janet Yellen, newly appointed chairperson of the Federal Reserve, and her inaugural address to Congress. Despite Ms. Yellen giving no clear-cut insight into how the Fed will proceed with reducing QE, she did make it clear that they do not intend on rushing the tapering process.
In the early morning hours of Wednesday, the investing world was greeted with a positive economic report from China, the first we have seen in a few months. A few hours later and on the opposite side of the world, the Bank of England increased their expectations for 2014 GDP growth by a decent margin. As it stands, gold is swiftly approaching the $1,300 threshold and is currently hovering around a three-month high.
BOE Updates 2014 GDP Forecast
The Bank of England surprised a lot of investors when they officially announced that their expectations for English GDP growth in 2014 has risen from 2.8% to 3.4%. Additionally, BOE governor Mark Carney announced that the jobless rate in the UK is expected to drop to 7% or below at some point this year. This was a particularly interesting announcement because back in August Carney said that he would not consider raising interest rates until the employment rate improved a bit. Though he also made it clear that the unemployment rate alone is not the sole factor governing the decision to raise interest rates or not, it is still a very important figure.
Hours before the BOE announcement, a Chinese report on imports and exports from last January was made public. Realistically, the market was not expecting much in the way of improved import/export readings. In fact, the market was only expecting to see imports rise by .1% on an annual basis. With this expectation in mind, it makes sense why so many were taken aback by the report, which indicated that January exports were up by over 10% on an annual basis. The news got even better for China as imports were also up by more than 10% in January, on an annual basis. Not only does this end a recent run of poor Chinese economic data, it gives gold and silver a boost to aid the rising safe-haven demand.
As for the rest of the week, it is expected that the marketplace will remain mostly quiet. There is little US economic data on the slate apart from Thursday’s weekly jobless claims report, and even that is not expected to impact precious metals spot values any considerable amount.
