Gold Spot Price Open: $1,244
Gold Spot Price Close: $1,240
Change in Gold Spot Price: -$4
Silver Spot Price Open: $17.50
Silver Spot Price Close: $17.35
Change in Silver Spot Price: -$0.15
Precious metals began the final day of the week conceding value, and as the day wore on those concessions only seemed to grow worse. When all was said and done, gold lost about 4 dollars while silver’s losses were somewhere in the neighborhood of fifteen cents. Platinum and palladium, on the other hand, finished the day posting mixed results.
USD Index Advances after Better than Expected Sentiment Reading
The US Dollar has bounced around quite a bit this week, but the greenback was able to finish the week strong on the back of a better-than-expected consumer sentiment index reading. According to the preliminary survey, the US consumer sentiment index rose from 84.6 in September to a current reading of 86.4. This news is so shocking because not only has the US economy been tricky to comprehend recently, but also because this week’s economic data from the United States was mostly negative.
Preliminary expectations were for a sentiment index reading of 84, so this data clearly beat out expectations by a long shot. Against rivals, the greenback has done well lately, but this week saw things change a bit. It will be interesting to see, in the coming days and weeks, if the greenback can continue to make gains or if today’s upward movement was an isolated incident. Of course, because the USD and precious metals are in constant competition, the Dollar’s advances today were a contributing factor in metals’ losses.
US Stocks Bounce Back From Recent Losses
For much of this week, stocks in the US have been volatile and, for the most part, downward-moving. Today, however, US stock indexes bounced back in impressive fashion in order to turn what was going to be a pretty poor week into one that really wasn’t so bad.
Today, stocks advanced due to two factors: The Fed’s possible delaying of further stimulus tapering, and some upbeat earnings reports. According to reports, GE reported far better than expected earnings for this year’s third-quarter and that news alone caused their shares to gain a lot of value. Morgan Stanley also reported solid third-quarter earnings.
In an address today, Fed Chair Janet Yellen alluded that the Fed may not be so quick to rid the US economy of accommodative monetary policies. Citing severe income inequality in the US, Ms. Yellen caused a lot of investors to think that easy money policies may stay even longer than expected. At present, most people aren’t expecting to see interest rate hikes until this time next year, at the earliest, but now those projections may be pushed back even further. So long as interest rates are expected to remain low for the foreseeable future, precious metals can only stand to benefit. Unfortunately, the USD is also in prime position to continue making gains, especially if the EU continues about its easy money policy ways. As the Euro continues to depreciate, the greenback is likely to continue gaining value.
Wrap-Up
To say the least, this week has been quite interesting. We have seen the value of equities as well as the value of the US Dollar jump around quite a bit, and this has a lot of investors confused. Due to this confusion, a risk-averse attitude began making itself known. This translated into positive spot value advances on the part of precious metals, but by the time the day and week came to an end, gold and silver were in only slightly better positions than they were when things got underway on Monday.
As we look ahead to next week, it will be interesting to see if the precious metals bulls continue gaining momentum, or if things will level off.
