Precious metals are making gains as of the early morning hours of Monday, but after falling all weekend, these gains are nothing to write home about. Looking ahead to the rest of this week, investors will have plenty of information and economic data to mull over and discuss. One of the most noteworthy events of the week will come on Thursday in the form of the latest European Central Bank meeting. With policy changes possibly coming this week, you can expect that the entire global marketplace will be paying close attention to what the ECB has to say.
In addition to the ECB meeting this week, investors will also be paying close attention to the progress of crude oil spot values. After last week’s meeting, crude oil has declined considerably and is still in a fairly weak position. In fact, oil has spent much of the last few weeks on the decline and is in search of some aid from outside market factors.
ECB Meeting Takes Center Stage
Unless you simply haven’t been paying attention, you are likely well-aware of the European Union’s collective struggles. The EU is and has been underperforming from an economic growth perspective and is, in the opinion of many, hurting the growth of the entire global economy as well.
This week, the beleaguered European Union will see their central bank meet for their latest policy meeting. As is always the case, investors from around the world will be paying close attention to the meeting in order to see if the ECB decides to make any changes to current monetary policy.
Over the last few weeks, the marketplace has gotten word of a possible shift in policy coming in the form of the introduction of Quantitative Easing measures. Mario Draghi, European Central Bank president, was quoted as saying that QE measures are still a definite possibility and that the EU is not counting them out. As such, the market interpreted Draghi’s comments as meaning that QE measures are on the way, and on the way soon. It will be interesting to see what kind of reaction the market has to this week’s ECB meeting should a shift in policy be enacted.
OPEC Leaves Policy Untouched
For the last month or more, the value, or spot price, of crude oil has been on the decline. The world’s number 1 commodity is suffering due to an excess supply of oil flooding the market at present. While this has led to happy people at the pump, it has not boded well for commodities, including gold and silver.
As a result of oil’s recent decline, the spot values of gold and silver have fallen too. Just last week, OPEC, the world’s most well-known oil cartel, held a meeting with regard to the recently falling prices. Though this meeting was expected to see OPEC reduce daily oil production quotas for member countries, OPEC instead remained put and wholly determined to see the situation through.
As a result of their inaction, the value of crude oil as well as the value of energy shares took a dive late last week. This lack of action also weighed on the value of gold and silver, which were drug from their somewhat stable price ranges. Now, as crude oil continues to decline in value, gold and silver will have to look elsewhere for any fundamental, underlying support.