Gold Spot Price Open: $1,149
Gold Spot Price Close: $1,145
Change in Gold Spot Price: -$4
Silver Spot Price Open: $15.66
Silver Spot Price Close: $15.62
Change in Silver Spot Price: -$0.04
Precious metals slid further on Friday to close out what has been, in truth, a fairly disappointing week. When all was said and done, gold lost roughly 4 dollars on the day while silver slid by only 4 cents. Platinum and palladium ended the week mixed, but neither metal moved too far in any one direction on Friday.
Stocks Retreat, but Finish the Month Strongly
Stock markets in the US will finish the week having performed poorly, but will end the month of October posting the largest gains we have seen in roughly 4 years. Stocks have had a rough week primarily due to the fact that US economic data continues to come back poorly. As it stands, we are seeing the US economy grow, but grow sporadically. Even though there are still plenty of investors worried about the slowdown currently taking place in China, there is renewed confidence that regardless of what happens in China, the US will be able to survive.
Over the past half year or so, we have seen strong corporate earnings in sectors such as healthcare and telecommunications, and this is helping propel the overall economy. As the US continues to weather the global economic storm, investors are and will continue to gain confidence that real growth can be sustained as we head into the New Year. For gold and silver, stocks have not helped matters at all this week as we are seeing gold and silver spot values fall right along with most major stock indexes. As we head into a new month and week on Monday, it will be interesting to see if gold and silver can rebound or if losses will continue to accumulate.
Gold Garners Some Support from Weaker US Dollar
Despite finishing the day in the red, gold and silver received some support from a weaker US Dollar. Still, precious metals cannot shake the commentary from the Federal Reserve earlier this week, which indicated that interest rate hikes very well might be coming in December. To finish the week, gold is sitting around a 3-week low and will likely open up next week in a similar position.
To be perfectly honest, it is going to be difficult for precious metals to make any lasting gains anytime soon. The reason for this is directly due to the fact that rates may be raised before the end of the year. The reason for this is that higher interest rates tend to increase the opportunity costs of holding gold/silver in lieu of other, more profitable interest-bearing assets. Simply put, raised interest rates are indicative of decent economic times, and decent economic times are not the most beneficial time for precious metals spot values.
Wrap-Up
Looking ahead to the first week of November, gold and silver’s price action will be directly influenced by what people think of the possibility of raised interest rates. If US economic data begins to improve as we move through the month of November, you can expect that investors will begin to consider raised interest rates as more and more of a realistic possibility. If this happens, I am not so sure there is much upside for gold and silver now through the end of the year.
