Gold Spot Price Open: $1,229
Gold Spot Price Close: $1,234
Change in Gold Spot Price: +$5
Silver Spot Price Open: $17.38
Silver Spot Price Close: $17.44
Change in Silver Spot Price: +$0.06
Gold and silver began the second day of this trading week in positive fashion, but as the day wore on stronger equities as well as a stronger Dollar ended up paring gains. When all was said and done, gold gained about 5 dollars while silver finished up by a few pennies above 5 cents. Platinum and palladium also finished the day edging higher, but only slightly.
US Equities Perform Well, Volatility Remains
After beginning the day trending significantly higher, US equity markets finished Tuesday reeling a bit and paring a lot of the earlier day gains. Today’s price action in equity markets shouldn’t come as too much of a surprise, however, as equity markets in the US and abroad have been unusually volatile over the last 2-3 weeks. The CBOE Volatility Index, also referred to as VIX, is at a more than two-year high and has risen by more than 75% since the onset of 2014. Throughout much of the year’s early months, the Russia-Ukraine crisis accounted for a lot of equity volatility, especially in Europe, but more recently other factors are causing stock markets to jump around from day to say.
Some of the more recent factors creating volatility in equity markets are the rise/spread of the Ebola virus, the crisis with ISIS, and recently poor economic growth from the European Union. Though US equity markets have been able to avoid much of the volatility that has plagued markets in other parts of the world, that much seems to be changing in recent weeks. As such, we will continue to keep a close eye on the day-to-day movement of US equity markets. Today, gold and silver spot values emulated equities by trending significantly higher to begin the day, but paring gains by the time markets neared a close. Still, some market experts are beginning to believe that the tide is shifting and that gold/silver bulls might finally be gaining some tangible momentum. I suppose we will just have to wait and see if this does, in fact, prove to be the case.
More Dire Economic News From Europe
Unless you have been living under a rock for the past few months, you are more than well aware that the German economy as well as the wider EU economy are struggling. Today, the struggle seemed to intensify as a report indicated that EU industrial output declined by 1.8% month-on-month during August. As for the year-on-year numbers, EU industrial output was reported as being down by nearly 2%.
In Germany, the ZEW economic sentiment index fell to -3.6 for this month. This figure was in stark contrast to expectations that the index would emit a reading of +1%. Though it is disappointing, there is nobody that is surprised with today’s poor batch of EU economic data. As has been the case recently, all eyes are slowly but surely turning to the European Central Bank meeting in order to see what they are going to do to combat slowing economic growth and rising deflationary pressures.
USD, USD Index Up On The Day
Perhaps contributing to the gold and silver’ late day concessions was the fact that the USD and the USD Index were both trending higher. Against the Euro specifically, the greenback neared 2-year highs that were reached little more than a week ago. So long as the data from Europe remains poor and the ECB implements monetary policy measured aimed at weakening the Euro, it is highly likely that the greenback will only continue to appreciate.
Wrap-Up
Looking ahead to the last three trading days of the week, it is likely that the attention of the global marketplace will remain fixated on the progress/volatility of global stock markets. According to a few experts, this could translate well for gold and silver as risk-aversion is slowly but surely taking hold of the marketplace. With so many investors wanting to rid themselves of perceived risky stock market investments, gold, silver, platinum, and palladium stand to benefit. Unfortunately, so too does the USD.
