Gold and silver declined in value a bit further on Tuesday, as most every news story worked against precious metals. With the European Central Bank meeting fast approaching, investors are in full speculation mode. More positive economic news in regards to the US economy was made public today, which helped the US Dollar make further gains against the euro currency.
China has been a source of economic data perceived as being bullish for gold and silver as of late, but stronger bearish forces are preventing either metal from stopping their respective declines.
European Central Bank Meeting
The number one event on this week's agenda to pay attention to for investors will be the ECB's monthly policy meeting. Since it is anticipated that the European Central Bank will loosen its monetary policies this Thursday, the euro has been declining fairly steadily, as European stocks rallied over the first day of the week.
Due to incredibly low inflation rates, and staggering economic recovery (from the 2008 worldwide recession), many experts feel as though the ECB will have no other choice than to lower rates across Europe.
As you might have expected, the euro's recent decline has prompted a rise in the value of the US Dollar, something that almost always puts downward pressure on precious metals. Though the ECB's potential slashing of rates is mere speculation at this point, the evidence is there, and investors are acting as though the policy change announcement has already happened.
Stronger US Economic Data
In the early parts of Tuesday morning the ISM non-manufacturing data for the United States came in stronger than anticipated. This data ended up giving the US Dollar a further boost while simultaneously putting further downward pressure on precious metals.
This, along with any further positive economic news will further the belief that Quantitative Easing may still be wound down before the year's end.