Gold Spot Price Open: $1,253
Gold Spot Price Close: $1,242
Change in Gold Spot Price: -$11
Silver Spot Price Open: $17.62
Silver Spot Price Close: $17.23
Change in Silver Spot Price: -$0.39
After beginning the week positively, precious metals backed down on Wednesday thanks to some news/expectations out of Europe. When all was said and done, gold lost closer to eleven dollars while silver’s losses neared 40 cents. Platinum and palladium also spent most of the day Wednesday conceding value.
Dollar Gains Strength As EU QE Rumors Abound
With very little economic data on the table this week from Europe, investors the world over are in constant discussion with regard to what the European Central Bank is planning to do in order to spur economic growth. As it stands, word on the street is that the ECB is planning on ramping up its purchasing of assets, expanding a policy many in the US now refer to as quantitative easing. If the ECB does, in the coming weeks, announce the blueprints for such a plan, the Euro will likely continue to depreciate against rival currencies, specifically the US Dollar.
Today provided a perfect example of that as the Euro declined sharply while the US Dollar made massive strides forward. Unfortunately for precious metals, the greenback’s positive day was likely a major contributing factor behind today’s losses. As the Dollar continues to gain strength against the Euro, as it is expected to do throughout the duration of this year and into next, precious metals will continue to have a hard time moving too drastically forward.
Report on the Fragility of EU Banks Puts More Pressure on Euro
You know this is a slow week of trading when two of the day’s top stories are both from the European Union. It is no secret that the EU, economically is and has been struggling for some time now, but most are unaware just how fragile the banking sector is. Today, a report from Spain indicated that 11 EU banks spanning across 6 countries are likely going to fail the upcoming European Central Bank comprehensive stress test.
The ire of investors only continues to grow as the ECB is quite simply refusing to print more money in order to inflate consumer prices to a respectable, safe level. At present, loads of analysts maintain that the EU is on the verge of a disastrous deflationary spiral that may result in another period of recession.
US Stocks Down Due to Plethora of Factors
Less than a day after the S&P 500 made its biggest jump in a year, all three major US stock indexes traded significantly downward. Citing a shooting in Canada’s parliament and falling crude oil prices, analysts are none too surprised that today’s stock market movement has been almost wholly downward. According to Anastasia Amoroso, of JP Morgan, “For the market to regain footing, we need the price of oil to stabilize.”
Leaders of OPEC nations are scheduled to meet in the near future, and the top discussion point will be whether or not they should halt production of oil in order to drive the price back up to what they consider sustainable levels. This is yet another crucial factor for the global marketplace to continue paying attention to.
Wrap-Up
This week continues to be slow from an economic data standpoint, but many investors are expecting to hear some sort of announcement from the ECB in the coming days. As we look ahead to the last two days of the week, investors will continue to keep their eyes on stocks as well as currency markets from around the world. With the USD continuing to gain momentum, it is likely that buying interest will be limited, though anything could happen as the week closes out.
