JM Bullion Gold and Silver Market Update (1/4/17)

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Gold Spot Price Open: $1,162

Gold Spot Price Close: $1,166

Change in Gold Spot Price: +$4

Silver Spot Price Open: $16.38

Silver Spot Price Close: $16.40

Change in Silver Spot Price: +$0.02

Precious metals continued their decent start to the New Year as it seems that buying interest has reappeared after disappearing, almost entirely, in December. When all was said and done, gold ended up adding about 4 dollars while silver added just 2 cents. Platinum and palladium also gained on the day, however platinum added barely more than 5 dollars while palladium ticked upward by about 30 dollars.

Gold Hits Multi-Week High on Dollar Weakness

Despite the fact that the greenback rode out the last few months of 2016 in impressive fashion, the first week of the New Year is seeing the USD feel pressures that have not been around for some time. Despite an upbeat report on manufacturing pushing the USD to a 14-year high on Tuesday, Wednesday saw the US currency move backwards. On Tuesday we were talking about the euro moving to its lowest point against the Dollar in more than a decade, but today the story was a bit different.

Helping the euro on Wednesday was a report that showed Eurozone prices in December that rose by far more than was expected. In addition to this, there was some evidence suggesting that business growth across Europe in December was the best we have seen for a single month in 5 years.

Today’s good news from Europe is being undercut by a few factors, so even though gains against the USD were made today it is unlikely that they will be able to be sustained for entirely too long. According to currency strategist Lee Hardman the reason for this is, “…the fact that the ECB has already announced an extension of its QE program into the end of this year. So it’s unlikely that the data is going to be strong enough in the near term to prompt a reassessment.”

Investors Digest FOMC Minutes

A big talking point on Wednesday was the release of the FOMC minutes from the Fed’s meeting a little less than a month ago. As you probably remember, the result of this meeting was that the Fed announced they would, indeed, be hiking interest rates just before the turn of the New Year. In addition to this, it was also suggested that further rate hikes are likely going to come throughout 2017 and beyond. As such, investors poured over the minutes in order to try and attain a better idea of when further rate hikes were going to come as well as how drastic those additional hikes might be.

In the lead-up to the minutes’ release, precious metals were not being given any help thanks to the surging nature of stocks both in the US and around the world. With that being said, the big takeaway for the day is the resilience of precious metals. Even with stronger stocks, metals put forth a nice performance.
The minutes themselves were rather vague and did not result in too much of a reaction. As expected, most members of the Fed are content with seeing US monetary policy tighten so long as economic conditions warrant. This was good news for monetary policy hawks, however very little in the way of specific details was divulged.

Wrap-Up

Today was not the most eventful day of the week, but the FOMC minutes did well to spice things up a bit. For gold and silver, today was another positive performance after a tough last few months of 2016. What will be intriguing to see is whether or not the strength we have seen thus far this week will be able to be sustained going forward, or if interest rate hike expectations and a stronger Dollar will continue to provide more pressure than can be withstood.

All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.