After hitting a 4-month high on Monday, gold has since paused and is now hovering barely above $1,340/ounce. Silver is acting in much the same way as gold, trading slightly down in the early morning hours of Tuesday. There is little activity on the economic news front, though there is definitely a lot to talk about.
As we move ever-closer to the end of February, the questions with regard to gold and silver's long-term strength are going to continue to circulate.
Ukraine's Civil Unrest Continues to Threaten Stability
Last week, one of the most heavily discussed topics was that of the ongoing civil unrest in the large Eastern European nation of Ukraine. Though protesters have been taking to the streets since this past November, the violence really began to pick up last week, with police and citizens crashing in all corners of the capital of Kiev. As it stands, the current death toll in and around Kiev has surpassed 100 and even though former president Yanukovych has since fled his presidential palace, order has not been restored. As civil unrest continues to threaten the overall stability of Ukraine and Eastern Europe in general, safe-haven demand for gold and silver is on the rise.
Also fueling safe-haven demand is a similar type of civil unrest currently going on in Thailand. Political rivals have been attacking each other for the past few weeks and, as is all too often the case, innocent civilians are being caught in the cross hairs.
Slowed Economic Growth Continues to Threaten China
As a result of recently sub-par economic data, the bank of China has been faced with some difficult decisions lately. Today, it was reported that China's central bank has taken over 100 million yuan from the financial system in an effort to temporarily tighten monetary policy.While this decision definitely caught the attention of investors from around the world, there is no clear consensus on what it means for the large Asian economy down the road. In all, the announcement had little impact on markets.
As we move forward into March and the rest of 2014, all eyes will be kept on any and all economic data emanating from China.