Gold Spot Price Open: $1,192
Gold Spot Price Close: $1,178
Change in Gold Spot Price: -$14
Silver Spot Price Open: $16.76
Silver Spot Price Close: $16.51
Change in Silver Spot Price: -$0.15
Precious metals continued their losing ways on Wednesday thanks, in part, to the conclusion of this week’s OPEC meeting. When all was said and done, gold ended up losing close to 15 dollars while silver conceded about 15 cents. Platinum and palladium finished the day roughly the same–in the same position they were in when the day began.
Pending Homes Data Does Little to Lift Metals
According to the National Association of Realtors, pending home sales for the month of October rose just slightly from the month before. Officially, the pending home sales index rose .1% from the month before to reach a reading of 110. This is a small increase that might have been bigger were it not for September’s data being revised upward.
On an annualized basis, the pending home sales index has improved by almost 2%. This is the critical aspect of the data. Even though October itself did not see a major spike in the number of pending home sales, the past year has been quite strong in that regard. What this data really does is reaffirm the already strong belief that the housing market in the US is, in fact, doing quite well. This probably helps you make sense of why this data ended up pushing precious metals downward. It also works to bolster the belief that interest rate hikes are going to be coming in December as so many people have now come to expect.
OPEC Agrees to Cut Production
We have known about today’s OPEC meeting for the better part of the last month or more, but over the last 30 days there have been few people who thought that it would bring about any tangible changes to the production of oil in OPEC countries. It seems as though I, as well as many others, were wrong because OPEC announced today that members did reach a production cut agreement.
Speaking to Reuters, an OPEC spokesperson confirmed that member countries had come to an agreement with regard to slashing the daily production of crude oil. Though very few tangible details have emerged, the one takeaway we have heard is that Iran will see its daily production reeled back to what it was before Western sanctions went into effect.
In September, Algeria proposed to reduce OPEC’s total daily output of barrels of crude oil to 32.5 million from more than 33.6 million that it is currently at. There has been no confirmation that this is what the production cuts will look like as two other OPEC officials have made it clear that these negotiations are still ongoing.
Saudi Arabian officials, speaking before the meeting got underway, said that in addition to OPEC members reaching a deal, they were also going to look for help from other, non-OPEC countries to cut daily production as well. This always seemed like a stretch, but with an agreement apparently having been reached it seems as though perhaps Saudi Arabia was successful in getting non-member countries to agree. We will continue following this story as more details are released. Hopefully, within a few days, we will know more about how big the production cut and whether or not non-member countries are part of this deal.
Wrap-Up
All told, you might be more surprised that precious metals were unable to make anything in the way of significant gains. In the wake of the OPEC meeting and purported deal, most commodities began trending upward, but precious metals, for the most part, were still in the red. There are a number of reasons as to why this might be so, but seeing as the OPEC news lifted metals from daily lows the performance of gold and silver might breed a different story tomorrow.
