For a long time, the bearish traders had been saying that gold prices would soon begin to get back to their recent highs. The FOMC Chairman indicated that the US economy was stronger than many people thought and if the Federal Reserve did decide to begin hiking its interest rates, there was no reason for the markets to be worried. While the market is still not in the same place it was at the beginning of the year, gold prices are now in the high single digits and are beginning to challenge the lows at which they were last January.
In anticipation of more of the same, gold prices are continuing to rise. While some believe that the crisis in Europe may be easing, many investors are expecting the US to finally come through with its stimulus package. If the Federal Reserve continues to hike its interest rates, this will put even more pressure on the metals prices and increase the volatility in the markets.
The US domestic job data enters the spotlight again this week and is sure to be another topic for discussion. A lot of money is being spent by the government to bolster the domestic economy. To some extent, these funds have been put to good use.
Every time the economy is better off, there is money to be made and more dollars in circulation. When the unemployment rate falls, the stock market increases. When the stock market increases, the buying power of your savings increases.
The reality is that US consumer spending is now projected to fall below the levels that were reached during the recession. But as well as the energy and transportation sectors, the retail sector is expected to take a huge hit due to weak sales.
Withthe US domestic job data entering the spotlight, the stock market will inevitably get a lift as people find out who the new head of the Federal Reserve is. When the US Federal Reserve starts to hike interest rates, the stock market will respond and put together a rally for the overall market.
Housing is seen as the main culprit. Lower home prices have seen to retail sales and therefore forced people into the stock market.
Retail sales have plunged in recent months and is the key issue that the Federal Reserve will try to address. Housing will also be a key topic for discussion at the next FOMC meeting, when they will be looking at US domestic job data and household income.
Economists are expecting unemployment to continue to rise in the retail sector and even in manufacturing due to the ongoing unemployment crisis. This will mean that retail sales are set to decline and retail employment will rise.
That said, retail sales should increase in some industries and housing will decline in some, according to some economists. Although retail sales are expected to decline in the retail sector, they are likely to increase in the housing sector.
The retail sector, retail jobs and housing are three key issues that will be discussed this week at the next FOMC meeting. There will also be other items for discussion such as speculation about fiscal policy and even speculation about the Eurozone crisis.
If you are not very familiar with foreign stocks, you should pay close attention to them. You may be a newbie, but hopefully you are aware of who the head of the Federal Reserve is and how important it is to global stocks.