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May 21st Early Week Silver Market Update

Gold and silver both began Tuesday on negative notes as the late day gains made on Monday were erased as quickly as they were realized. There are few market-relevant news stories set to be released on Tuesday, though Wednesday is a different story entirely. The US Dollar Index was fairly higher during the morning on Tuesday which is likely the reason behind why gold and silver dipped in value a bit. Around 9:30 AM on Tuesday gold was down about 17 dollars on the day while silver was down closer to a half dollar. With US stocks and currency performing well yet again I would not expect ending numbers on Tuesday to be anything to write home about.

Chinese Manufacturing Data to be Released

If you have paid any close attention to the state of the world's top economies lately, you are likely well aware that China has been outputting disappointing report after disappointing report. All of these negative stories have done a good job of making investors doubt whether China should be considered to still be the world's second strongest economy.

Tomorrow will do a good job of either verifying that China is slowing down as an economy or is possibly improving with the release of the newest bit of manufacturing data. In my honest opinion I believe that manufacturing data out of China will be disappointing tomorrow and will cause more investors to both doubt them as a nation as well as stay away from making any substantial investments there. Yesterday saw a report that indicated housing prices in the country rose by a few percentage points in April which is never a good thing. China can't seem to catch a break lately and because of this another popular thought is that the country's central bank is going to need to take action soon in order to fight off rising inflation.

Bernanke and FOMC Notes

Wednesday will see the Federal Reserve of the United States' Chairman, Ben Bernanke, address the US Congress about the state of the economy as well as the future of monetary policy. All of the rumors that have been circulating about the Fed ending their bond-buying program will likely be either confirmed or denied tomorrow during Bernanke's address. Also set to be released tomorrow are the notes from the latest Federal Open Market Committee's meeting which could also shed some light on the future of the US' monetary policy.

With how well the economy in the US has been performing lately, it would not be too surprising if their was an announcement that QE would either be ended or wound down in the near future. Should this type of announcement be made, you can expect it to put more downward pressure on gold and silver. I feel safe in saying this because mere rumors about the ending of QE a few weeks ago brought down the value of gold and silver, which can only lead one to anticipate that an actual announcement on the matter would do the same at an even more drastic level.

While writing this article, gold fell even more and is now, as of 10 AM, down over 23 dollars while silver is now down over a half dollar.

Posted in Market Updates

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