Gold and silver are feeling heavy selling pressure throughout the first half of the day on Wednesday thanks to remarks made by both Janet Yellen and Vladimir Putin. The market is continuing to focus on the crisis in Ukraine but there have been few new developments as of midday on Wednesday. Starting last weekend, the Ukrainian military moved through parts of eastern and southern Ukraine in an effort to oust pro-Russian rebels who have taken over many towns and buildings throughout the country.
There will be a lack of US economic data this week which means that investors are more than likely going to hold their positions until new inputs make their way to the market.
Remarks By Putin and Yellen Put Intense Pressure On Precious Metals
It is no secret that a majority of the investing world is and has been focusing on any and all events happening in Ukraine. More recently, as recently as last weekend in fact, the violence in Ukraine to a turn for the worse as the Ukrainian military was sent out in an effort to dispel pro-Russian forces from the eastern and southern parts of the country. As most everyone expected, the Ukrainian military and the rebels clashed, causing a large amount of damage and dozens of deaths. Just as the situation grew as dismal as it has been in months, things might have gotten a bit better as early as this morning.
Vladimir Putin, while speaking to the head of the Organization for Security and Cooperation in Europe, said that he is willing to pursue peaceful means of resolving the crisis in Ukraine. What’s more, he also called upon rebels to refrain from following through with a referendum that would more than likely turn over possession of an even larger part of eastern Ukraine to Russia. Investors seem to be believing Putin as spot values took a dive almost immediately after his remarks were made public. It will be interesting to see if Putin does actually follow through with bringing about peace in Ukraine for the first time in a long, long time.
Janet Yellen, president of the US Federal Reserve, spoke to the Congressional Joint Economic Committee today and once more reiterated her positive outlook on US economic growth for the remainder of the year. What’s more, she also maintained that interest rates would remain low for the foreseeable future. If you can recall, investors not too long ago believed that interest rates in the US were going to be risen by early Spring next year. In all, today’s remarks by both Putin and Yellen ended up working against precious metals as spot gold fell below $1,300 and silver is more rapidly approaching the $19/ounce level. If this week yields the minimal amount of economic and geopolitical inputs that we are expecting it is more than likely that spot values will continue to fall. On the other hand, however, increased violence in Ukraine may end up reviving safe-haven demand yet again.
