Gold Spot Price Open: $1,214
Gold Spot Price Close: $1,190
Change in Gold Spot Price: -$24
Silver Spot Price Open: $16.72
Silver Spot Price Close: $16.31
Change in Silver Spot Price: -$0.41
Precious metals fell sharply on Wednesday even despite some US economic data that might have led people to believe the opposite might happen. When all was said and done, gold was sharply down by more than 20 dollars while silver was also down noticeably, by more than 40 cents. Platinum and palladium both fell on the day as well, with platinum down by about 20 dollars while palladium fell by 10.
New Home Sales Data Mostly Disappoints
Though it makes very little sense to most, the day after existing home sales came back the best we have seen in almost 10 years, new homes sales data mostly disappointed. Even more surprising was the fact that precious metals were unable to capitalize on such a downbeat report.
According to the US Department of Commerce, sales of new homes in October fell by more than 3% from September. Adding to the troubling news, September’s new homes sales data was revised downward. Now, the seasonally adjusted number of new homes sold is sitting at just over 560,000. To put in perspective how truly disappointing today’s data was, the expectation was that the seasonally adjusted number of units sold would be above the 590,000.
Gold and silver were unable to make gains today, and while that is surprising to most, the fact of the matter is that housing data has been positive in recent months. According to Royce Mendes, economist at CIBC World Markets, “Housing starts surged last month, and has been on an upward trend recently. Moreover, months’ supply of new homes ticked up in October. Together, that leaves room for another sales pickup in the coming quarters.” So basically, even though today’s data was poor the overarching tone of housing data has been positive and is expected to continue that way. As such, precious metals were always going to have a tough time capitalizing on today’s data miss.
Durable Goods Data Sinks Metals
Even though it may seem confusing that gold and silver were unable to gain in the wake of a weaker than expected housing report, the durable goods data that was released will help you make sense of metal’s downward trajectory today. In October alone, sales of durable goods rose by more than 4% despite expectations for a rise of only 2.5%. What’s more, September’s durable goods data was revised to show an increase in orders of 4% on the dot.
All things considered, the strong durable goods data did well to buffer the already-strong belief that interest rates will be raised come the conclusion of December’s FOMC meeting. As such, it was always going to be difficult for metals to do anything other than shed value today. Right now, gold is hovering right around a 9-month low and looking like falling even further. With US markets closed tomorrow in observance of the Thanksgiving holiday, it will be interesting to see what metals do come the opening of markets on Friday. Regardless, it is widely expected that the rest of the week will be quieter; typical of the Thanksgiving holiday.
Wrap-Up
Even though we were expecting a smooth ride into the Thanksgiving holiday, we received a good bit of data that ended up shaking up the market a little bit. Tomorrow will see things quiet down, but regardless the thoughts and opinions of investors do not seem to be changing much at all. As of now, interest rate hikes are expected to be announced next month and investors are acting accordingly.
