Gold Spot Price Open: $1,259
Gold Spot Price Close: $1,262
Change in Gold Spot Price: +$3
Silver Spot Price Open: $17.60
Silver Spot Price Close: $17.63
Change in Silver Spot Price: +$0.03
Gold and silver began this week posting a bit of a recovery from one of the worst weekly performances we have seen in recent history. When all was said and done, gold managed to gain back only about 3 dollars while silver gained roughly 3 cents. Platinum and palladium did not get off to the best start, as both metals lost about 5 dollars apiece.
Metals Bounce Back Slightly
Even though the gains we are seeing today are marginal, it was an encouraging sign mostly because of how poorly metals performed throughout the whole of last week. Investors are jumping at opportunities to buy physical metals at what are, truthfully, bargain prices. What’s more, China was celebrating a holiday last week and as people return from those celebrations physical demand will pick back up.
Also helping physical demand today was the fact that Donald Trump was the perceived victor in Sunday night’s presidential debate. The second of three debates, important issues were discussed and Trump appeared to handle himself coolly and confidently, even despite some new controversies having arisen in recent days. For those who are wondering why a Trump debate victory might be good for gold and silver, the answer to this is rather simple. A Trump debate victory has investors thinking that Trump has a leg up on Hillary Clinton in the race for the Presidential office. A Trump victory, even if only a perceived one, is one that breeds a lot of uncertainty across both the US and global marketplaces. While Clinton represents a continuation of the past 8 years, Trump represents a totally different type of governance. With no one truly certain of what Trump might do in office, investors flock to safe-haven metals.
Speaking to this was Capital Economics who, in a letter to clients, said, “the heightened economic and geopolitical uncertainty that would follow a victory for Donald Trump in November’s US presidential election would surely see the dollar weaken against traditional safe havens such as the Japanese yen, and the price of gold would jump. Fears that China might dump US assets and the prospect of a further delay before the Fed raises rates would be likely to weaken the dollar against the euro and sterling too.”
Even though it is still too early to say which way the election is going to go, this bit of knowledge will at least help you understand why metals have moved the direction they have in the wake of last night’s debate.
What is surprising on this Monday, however, is that US stock indexes are up across the board. Typically, with people jumping to get safe-haven assets, stocks tend to suffer. Perhaps the upward price action we are seeing on the part of metals is being much more heavily driven by bargain-hunting than safe-haven demand after all; it is tough to say. What we do know is that precious metals are likely to have a decent start to this week thanks to Chinese investors being back in full-swing.
Wrap-Up
All in all, Monday was a mostly uneventful day with very little in the way of fresh, fundamental developments to talk about. As we inch our way through October and into November, the US election will be thrust more readily into the spotlight. What this means for precious metals all depends on what the polls are saying, but we do know that gold and silver are likely to be moving in direct correlation with who the public thinks has the upper-hand at any given point in time.
