Precious metals are conceding value today mostly thanks to stronger US equities as well as a stronger US Dollar. This week is expected to be quiet from an economic data standpoint, and up to this point it has lived up to expectations. There really haven’t been many stories to report on, but the focus of the marketplace has shifted to Greece and its many economic and financial issues.
For precious metals, it is encouraging to see so much uncertainty across the global marketplace, but with the USD and US equities doing better, it will be difficult for spot values to retain anything resembling decent positions. As the week plays out, I imagine that gold and silver’s price action will be majorly dictated by what is going on with US equities and the US Dollar.
Greece’s Problems Continue to Snowball
This week has been marred with talk of Greece’s new government and their refusal to cooperate with preapproved austerity and debt reduction measures. These measures were put in place in order to allow for Greece to become eligible for financial support from the European Union. Greece’s new government does not want to cooperate with the European Union and for that reason, many people believe Greece will soon be exiting the EU.
Germany is one of the biggest lenders to struggling EU economies and is not taking kindly to Greece’s obstinate stance. While many people are fearing that Greece may leave the European Union before March, even more people are afraid that Greece’s potential exit from the EU may prompt other smaller EU nations to do the same. Though it is impossible to say for sure what the future has in store for Greece and the rest of the European Union, I can say for certain that we will continue to keep a close eye on any and all happenings across the region.
In other news released early this morning, it was reported that Chinese inflation fell to a 5.5 year low during the month of January. Inflation in the large nation fell thanks to a decreasing demand and smaller supply of raw commodities. In addition to this, it was reported that China recently injected some liquidity into its financial system in an effort to boost its economy.