Gold Spot Price Open: $1,208
Gold Spot Price Close: $1,212
Change in Gold Spot Price: +$4
Silver Spot Price Open: $17.36
Silver Spot Price Close: $17.22
Change in Silver Spot Price: -$0.14
Precious metals experienced mixed results but were seen hanging on to most of yesterday’s gains throughout much of the day on Tuesday. When all was said and done, gold was able to gain about 4 dollars while silver declined, to the tune of about 14 cents. Platinum and palladium both also finished the day moving upward, both by about 15 dollars or so.
IMF Revises Global Growth Forecast
The International Monetary Fund took time today to publish its revised forecast for global economic growth in 2014. Though it didn’t come as much of a surprise, the IMF reduced its forecast from 4% annual growth to just around 3.8%. This figure scared the marketplace a bit and provided a small amount of underlying support for gold and silver. Also as a result of today’s IMF revision, equity markets in the US and around the world took noticeable dives downward. It is never a good sign when the IMF decreases its forecast for global growth, and such translated into equity markets today.
According to Karyn Cavanaugh, of Voya Investment Management in New York, “People get worried when they hear the IMF talk about growth prospects around the world falling. The economic data from Europe is not good, some of the steam is getting let out of the economy. We don’t have earnings data to drive us yet this week and let’s face it, that’s the meat and potatoes of the market.” To put it simply, there really isn’t much going on in the market to help drive equities, and so long as that is the case, precious metals stand to benefit.
Despite the IMF’s somewhat bleak outlook on global economic growth, the organization is convinced that the US economy will grow considerably by year’s end. Officially, the IMF has forecast the US economy to grow by more than 2% by the time this year is brought to a close.
German Factory Production Disappoints
Keeping with recent trends, today brought about yet another poor economic report from the Euro Zone. According to a report made public earlier this morning, German factory output had fallen by about 4% during the month of August. While most experts were expecting outputs to decline, their forecasts were for a decline of no more than 2%. This news only adds to the growing concerns that deflationary pressures may soon have a stranglehold on the EU economy.
Despite the fact that the USD Index traded lower today, this currently ongoing string of weak European economic data has given the greenback a lot of strength. So long as this continues, the Dollar will continue to make up value against a Euro that is continuing to decline due to the loose monetary policies being employed by the European Central Bank.
Wrap-Up
Looking ahead to tomorrow, the market is already beginning to preoccupy itself with the release of the Federal Reserve’s minutes from their most recent meeting. As has been the case recently, investors will be looking for any clues regarding the raising of interest rates in the US. Currently, most are expecting rate hikes to take place sooner rather than later, but no one really has any concrete idea about what that time frame actually means. Though I, personally, do not think tomorrow’s minutes will provide much detail about the future of monetary policy in the United States, the market will be paying attention nonetheless.
