Gold Spot Price Open: $1,201
Gold Spot Price Close: $1,200
Change in Gold Spot Price: -$1
Silver Spot Price Open: $16.89
Silver Spot Price Close: $16.81
Change in Silver Spot Price: -$0.08
Precious metals will end the day Friday having lost some value, however the week as a whole saw gains made by both gold and silver. When all was said and done, gold ended up losing a single dollar on Friday while silver lost about 8 cents. Platinum added 8 dollars on the day, but palladium ended the day having lost almost 10.
Strong December PPI Reported
Even though Friday was not necessarily the most action-packed day of the week, it did bring about an economic report from the United States that is, at least, worth mentioning. According to the US Department of Labor producer prices in December rose by a seasonally-adjusted .3%. This is a solid rise and one that is about in line with what most market experts were anticipating.
If you strip food and energy from the producer price data, the rise was .2%. As for 2016 as a whole, producer prices ticked upward by more than 1.5%. This is much better than what had happened in 2015, where producer prices fell by just more than 1%. All in all, the positive PPI data did not do precious metals any favors and likely contributed to Friday’s small losses. Stocks in the US ticked upward after the data’s release, so gold and silver were always going to be fighting an uphill battle to close out the week.
Trump Uncertainty Works in Precious Metals’ Favor
As we touched upon briefly after Donald Trump’s uneventful press conference which was held earlier this week, the uncertainty surrounding his presidency is something that is helping drive safe-haven demand for gold and silver. With his official inauguration just 7 days away, there are now more questions than ever with almost no answers to be had.
After his first press conference in more than a month came and went with next to 0 new information divulged, investors are still wondering what, exactly, he intends to do as far as his economic and fiscal plans are concerned. So long as his intention remain a mystery to the market as a whole, gold and silver are likely going to continue to be given support. In the words of Ole Hansen, head of commodity strategy at Saxo Bank, “Trump is turning out to be gold’s best friend. We just don’t know anything about his presidency and that uncertainty is playing into gold’s hands.”
The next meeting of the Fed is more than 2 weeks away, so unless Trump’s plans become much clearer in a hurry, the support precious metals are currently receiving might very well end up continuing until the FOMC meets. With that being said, the upbeat nature of economic data from the US has many investors worried about what the FOMC meeting will bring as far as commentary is concerned. Though spot values may continue to appreciate in the near-term, positive remarks from the Fed with regard to the economic standing of the country may undo any gains made over the next 15 or so days. If Janet Yellen speaks to the media and alludes that another interest rate hike is right around the corner—something that is not at all out of the realm of possibility—gold and silver may very well concede much or all of the value that has been gained over the past few weeks.
Wrap-Up
In all reality, it goes without saying that the biggest happening next week will come in the form of Donald Trump’s inauguration. There are not very many large pieces of economic data being waited on by the market, so we will assuredly see a lot of presidential speculation throughout the whole of next week.
