Gold Spot Price Open: $1,175
Gold Spot Price Close: $1,183
Change in Gold Spot Price: +$8
Silver Spot Price Open: $16.54
Silver Spot Price Close: $16.54
Change in Silver Spot Price: NO CHANGE
Gold and silver continued their winning ways on Monday as spot values continued to climb even despite a crude pullback. When all was said and done, gold ended up gaining about 8 dollars while silver added roughly 11 cents before conceding that value and finishing the day unchanged. Platinum and palladium both gained on the day as well. Both metals added between 5 and 10 dollars.
Rise in US Oil Production Unseats Oil Rally
For the past 2 or so weeks, crude oil has been on a rally of sorts. This is mostly due to the fact that OPEC countries, as well as some non-OPEC countries, made an agreement to slash oil production in an effort to prop up oil prices that have been beaten down at seemingly every turn for well over a year now. The idea behind this agreement is that fewer barrels of crude oil being produced will inevitably drive the value of oil upward. Though OPEC countries—namely Saudi Arabia—have proposed similar production cuts in the past, they have never fully worked out. At least for now, this time appears to be bringing about different results. Prior to the deal beginning on the 1st of January, there were plenty of people who had their doubts with regard to whether the deal would actually go through as planned. Now that we are seeing OPEC countries cooperate with the deal, crude prices have been on the up and up for a little over a week now.
Today, however, saw crude oil spot values back down to some extent thanks to an increase in US crude oil production. Oil rigs in the US have seen increased production for more than the past two months, and a report released last week indicated that this production spike will not end any time soon. As if it weren’t already obvious, the US is not part of the OPEC deal and, as such, is able to produce as much oil as it would like. Thanks to reports indicating that US oil production continues to climb, crude oil ended up back-tracking to some extent on Monday. Despite this, gold and silver were still able to get the week off to a strong start.
Metals Show Resilience Thanks to British PM Comments
Even though crude oil was seen falling on Monday, metals were thriving thanks to comments made by the UK’s new Prime Minister. In a statement, PM Theresa May made it very clear that there would be nothing resembling a partial withdrawal from the EU. She said that the UK will completely and totally withdraw from the EU; something that quelled concerns that perhaps the referendum would be undone by the new PM.
Precious metals are receiving what can best be described as a safe-haven boost thanks to Ms. May’s comments. The uncertainty that shrouds a UK-less EU is something that has a lot of investors wanting to put their money into safe assets like precious metals rather than risky stock market investments. In fact, today saw most global equity markets tick lower. This is one more factor that came to the aid of both gold and silver.
Monday saw precious metals get the week off to a great start. Thanks to a combination of weaker equities and comments from the new UK Prime Minister, metals were benefitting from profit-taking. As we look ahead to the rest of the week, you can bet that we will continue to watch the movement of crude oil prices as well as any economic data that may stream in. For metals investors, however, we can reflect on a positive start to what is the first full week of 2017 trading.