Spot gold and silver have been trading up most of the day thanks to a pressured US Dollar. This 5-day trading session was never expected to yield all that much economic data, but what little data is on the slate for this week was made public this morning. For the first time in a few days, gold is back up above $1,300/ounce while silver is edging closer towards ever-important $20/ounce mark.
The crisis in Ukraine is still catching a lot of attention from investors but has faded to the background somewhat due to a lack of any major, new developments. Last Sunday, pro-Russian rebels in the Donetsk region of Ukraine held a referendum vote to determine whether the aforementioned region would remain part of Ukraine or become an independent state that would more than likely join the Kremlin shortly thereafter. According to initial reports, the referendum saw 90% of those who voted vote in favor of Donetsk becoming independent. With that in mind, however, it is important to note that the Ukrainian government dismissed the referendum completely and subsequently vowed to continue fighting entrenched rebels. Safe-haven demand is and has been given a boost from the events in Ukraine, but as we hear of less violence the demand for safe-haven gold and silver is likely to also decline.
EU, US Economic Data Steals Market’s Attention Today
Despite this week not being expected to yield much economic data, today was an exception. The EU published its industrial production for March and the data showed production numbers fall by about .3% in March and .1% on an annualized basis. Germany’s consumer price index fell by .2% in April but was up by more than 1% on the year. France’s consumer prices remained even in April but, like Germany’s, were up on an annualized basis. This data, though not as downbeat as many might have been expecting, was enough for investors and market analysts to further speculate about if/when the European Central Bank planned on implementing some sort of monetary stimulus in order to stave off growing deflationary concerns.
In the United States, it was reported that the producer price index was up by more than a half percentage point in April. This news ended up putting downward pressure on the US Dollar while simultaneously giving spot gold and silver a boost. Now, as we head into the latter part of the week, investors will continue to keep a close eye on anything and everything happening in Ukraine. If violence escalates we will more than likely see safe-haven demand intensify yet again. Currently, many Western nations are condemning Russia for not doing more to deescalate the tensions in Ukraine, especially after president Vladimir Putin told media he would be willing to entertain peaceful means of resolving the crisis barely more than a week ago. This whole crisis has shifted a lot over the course of the past two months, but like we have been saying this whole entire time, it is still far from being resolved and it is looking as though things will deteriorate before they get any better.