What a difference one week makes! On Thursday's blog post my title was, "what a difference a day makes". In the headline driven market we find ourselves where fundamental and technical analysis count for little, the impending deflationary death spiral we were confronting early in the week melted away with one comment from ECB President Mario Draghi: "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough." That last sentence sent global risk assets skyrocketing into the weekend.
December Silver soared on Wednesday as demand for higher yielding assets increased amid speculation the Fed was ready to implement its new quantitative easing plan.
The current leg up in this market was triggered by the news that many Fed members were in favor of large purchases of long-term government securities. This news came out via the Fed’s September minutes.
More Bad Economic News Drives Dollar Lower; Fed May Renew QE
The U.S. Dollar was under pressure against most majors on Tuesday on speculation the Fed will consider renewing its quantitative easing program following next week’s FOMC meeting on August 10. Another round of weak economic data also contributed to the weakness in the Greenback which drove the Dollar to its lowest level since April against some of the currency pairs.