For the second consecutive day this week, precious metals are feeling pressure from a market that is becoming increasingly bearish by the day. Due to the celebration of the Memorial Day holiday on Monday, most traders did not make their way back to the market until Tuesday. It was on Tuesday that a number of bearish factors culminated into one of the largest single-day losses spot gold and silver have seen thus far this year. Now, as risk-appetite is on the rise, precious metals investors are facing an uncertain last few days of the week.
Not helping precious metals at all on Tuesday was the heavy slate of US economic data that was scheduled to be released, most of which was better than market expectations. As a result of this data, gold and silver were feeling even more downward pressure, pressure that continued to be felt throughout the day today as well.
Risk-Appetite On The Rise, Metals On The Decline
Over the last few weeks, investors have been taking notice of surging stock indexes from around the world. As these equity markets continue to improve and gain momentum, the value of precious metals will more than likely continue to be pressured and decline in value. There is no saying for certain whether or not equity markets will continue to gain momentum, but the current economic atmosphere is one that lends credence to the belief that they will.
Not helping precious metals at all is the fact that the crisis in Ukraine is continuing to deescalate. Over the weekend, Ukrainian citizens took to the polls in order to elect their first official leader since former president Yanukovich was ousted. What’s more, Russia has recently made it clear that they are willing to assist Ukraine and Western powers in order to resolve the crisis through peaceful means. Seeing as Petro Poroshenko, a Ukrainian billionaire who has made it clear he intends on working with Russia as well as the rest of Europe, is set to take office, it is looking more and more like the crisis in Ukraine will become more of a regional issues as opposed to a headline-grabbing crisis the whole world must pay attention to.
As it stands, spot gold is sitting somewhere in the neighborhood of $1,250/ounce while silver is edging lower, closer to $19/ounce. The overriding fear held by precious metals investors is that spot values will now remain subdued for the near future. For this reason and many more, the last two days of this week will be of utmost importance to investors from around the world.