Gold and silver both conceded some value as a result of a technical correction after Friday’s gains. The market is continuing to focus on Ukraine as tensions across the country are not deescalating in the slightest. Unlike last week, however, there will be a significantly greater number of US economic reports to divert some of the attention away from Ukraine.
Among this week’s reports from around the world is a key piece of Chinese economic data, due out on Thursday. Last weeks downbeat manufacturing PMI for China has only worked to increase worries with regard to the Chinese economy’s actual strength. It will be interesting to see how the Chinese central bank combats both a weakening manufacturing sector and increasing financial worries.
Crisis In Ukraine Only Getting Worse
Last Friday, investors were very apprehensive with regard to how the crisis in Ukraine would develop over the weekend. it turned out that things did not really change much, but a few military observers were taken hostage by anti-Ukraine rebels. Just today, the governor of Kharkiv was shot in the back by rebels who are currently attempting to take control of the city.
The Ukrainian military is unable to respond out of fear that they will be invaded by the Russian military, which is currently positioned along the Russian border with Ukraine. Over the weekend, Russian aircraft were reported to have violated Ukrainian airspace on a number of occasions. The reason Ukraine’s military is standing idly by while pro-Russian rebels take over the eastern half of the country lies within a statement made by Russian officials claiming that any further attacks on Russians in Ukraine will be viewed as attacks on Russia itself. Because the Ukrainian military is outclassed and outnumbered by Russia, they are avoiding doing anything that may provoke their militarily dominant neighbor.
Included in this week’s US economic data are Wednesday’s GDP report and Friday’s April jobs data. The FOMC is scheduled to meet until Wednesday, at which point the market is expecting to hear of another reduction to Quantitative Easing. It will be interesting to see how the next few days’ events will affect spot gold and silver as we say goodbye to April, and thus the first quarter of the year.