Keeping in line with last week’s price action, both gold and silver opened up this week in impressive fashion and were able to close the day having posted solid gains. Overall, it seems as though the attitude of the global marketplace is changing from one that was confident in equity markets to one that does not know what the immediate future holds. Because of all this uncertainty abounding across the global marketplace, it really should come as no surprise that gold and silver are doing so well during the opening stages of this week.
Today, the market reacted to many of the same factors as the eyes of investors were firmly fixated on equity markets, currency markets, and the price action of crude oil. All in all, I expect that these same factors will continue to have a heavy influence on the market as the rest of this week plays out. For gold and silver, it will be interesting to see if today’s gains can be retained or even built upon as we head further into this New Year.
Led by Oil, Stocks Decline
Thanks to crude oil spot values that hit fresh 5.5 year lows today, stocks in the US and elsewhere around the world were prompted to turn downward. Led by the declining share price of energy shares, most major global stock indexes opened up this week performing similarly to how they did a week ago. Overall, there is a general sense of uneasiness on the part of global investors. With a few upcoming central bank meetings garnering a lot of investor attention, most investors simply cannot decide what moves to make.
Others, however, have seen this growing sense of uncertainty and have immediately fled to precious metals for protection. Thanks to growing safe-haven demand, physical purchases of gold and silver are, and have been, on the rise. More economic data from the US and elsewhere around the world is expected to be released as this week plays out, so it will be interesting to see what kind of impact it has on the precious metals market.
Helping gold and silver even more today was the fact that the US Dollar Index backed off from record highs experienced last week. Though the greenback remains in good standing compared to its European rival, the same cannot be said about many other currencies around the world. For the Euro, a growing belief that a bond-buying program will be announced at the upcoming European Central Bank meeting is keeping the currency in check and trending downward. Already at record lows against the USD, some experts believe the Euro’s descent is not quite finished.