Gold Spot Price Open: $1,203
Gold Spot Price Close: $1,212
Change in Gold Spot Price: +$9
Silver Spot Price Open: $17.02
Silver Spot Price Close: $17.06
Change in Silver Spot Price: +$0.04
Precious metals performed decently on Friday to close out the week on a high note. When all was said and done, gold added 9 dollars while silver added 4 cents or so. Platinum and palladium both gained impressively, with platinum adding more than 20 dollars while palladium tacked on more than 30.
Janet Yellen Comments on US Economy
Late in the day on Thursday, Fed chairperson Janet Yellen commented on the US economy, among other things. The speech was music to the ears of monetary policy hawks due to the fact that Yellen made it clear she thinks rates should be raised in order to preserve jobs and keep inflation at an acceptable level. In her remarks to the Stanford Institute for Economic Policy Research, she said, “I think that allowing the economy to run markedly and persistently “hot” would be risky and unwise…I consider it prudent to adjust the stance of monetary policy gradually over time.”
With unemployment below 5% and inflation at its highest point in more than 2 years, it is becoming commonly accepted that the Fed is going to raise rates a few more times this year. With that being said, Donald Trump—who was inaugurated today—is still an economic wildcard. Though he has said that he wants to improve the economic standing of the country, he really hasn’t elaborated too much on how this is going to be accomplished. This could, potentially, throw a monkey wrench in the Fed’s plans.
Another key point Yellen made was that if the Fed reverses course and decides to hold off on raising rates, this is something that could force inflation to shoot upward and destabilize what looks to be a recovering economy.
US Dollar, Stocks Recover Slightly
Right from when the day began, both the US Dollar and US stocks have improved from what has otherwise been a poor week. The USD initially improved, but by day’s end finished the day and also the week in poor fashion. This contributed to the gains made by precious metals.
Stocks did well on the day, and this is largely being attributed to the widespread belief that Trump will be good for US business. Though he has not really elaborated on what his specific economic intentions are, his past business experience has convinced a large number of people that he is well-suited to further improve the recovering economy.
As for what the first days of Trump’s presidency will mean for gold and silver, that is tough to say. He has been particularly quiet since winning the election and has provided little to no insight as to what he might do when he assumes office. This has helped prop gold and silver up, but now that he will be thrust into the public eye and ear, there is no saying what the immediate future holds.
Wrap-Up
Thanks to an almost undivided focus on the US Presidential election, there were not too many fresh economic inputs. Trump’s inauguration, though a big deal, did not have too much of an impact on the marketplace to close out the week. What is more likely to have an impact is the things Donald Trump says and does through his first 100 days as President. They say the first 100 days really sets the tone for what the President’s time in office will be like. There are plenty of reasons to believe why he might or might not be good for precious metals, however we will just have to wait and see in order to find out.
