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May 13th Early Week Silver Market Update

Gold and silver are trading down, but only slightly after the release of the latest retail sales report for the United States. This week is already shaping up to be a slow one as there are very few new inputs making their way to the market. While there are still plenty of investors who are concerning themselves with the crisis in Ukraine, there have been limited reports of new violence, only reports of the referendum which took place on Sunday. As it stands, spot gold is still hovering below the $1,300 threshold while silver is still well below $20/ounce. Over the last few weeks it has been painfully clear that gold and silver have hit a bit of a roadblock as few factors other than safe-haven demand are able to drive spot values forward.

Crisis In Ukraine, Monetary Easing Speculation Grips Europe

As has been the case for the past few months or so, the market is paying incredibly close attention to the crisis in Ukraine. Violence between pro-Russian rebels and the Ukrainian military continues to rage throughout the eastern and southern parts of the country and the death toll is continuing to mount.

Just this weekend, rebels who have seized control of large portions of eastern Ukraine held a referendum vote to determine the fate of the Donetsk region of the country. Preliminary reports claim that 90% of those voting preferred to leave Ukraine and potentially join the Russian Federation. Having said this, however, there are widespread reports claiming that the referendum vote, much like the one that decided Crimea's fate, was rigged by the rebels who hosted it. For this reason and many more the Ukrainian government is not willing to even entertain the idea that the referendum was in any way legitimate. Safe-haven demand for gold and silver as a result of the crisis in Ukraine is definitely still a factor affecting spot values currently, but instead of pushing gold and silver to make substantial gains, safe-haven buying is doing more in the way of preventing precious metals from declining in value any further than they have already.

In other European news, the German ZEW economic index was released today and yielded a reading that was none too favorable. Today's report only added fuel to the speculation that the European Central Bank will soon implement some sort of monetary stimulus measures in order to fight growing deflation concerns. The weaker ZEW index is currently putting some light downward pressure on the euro currency which, in turn, has given the US Dollar a slight boost. Seeing as the duration of this week is expected to be mostly quiet from an economic data standpoint, there is no real way of saying what direction spot gold and silver will head in.

Posted in Market Updates

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