Gold Spot Price Open: $1,224
Gold Spot Price Close: $1,194
Change in Gold Spot Price: -$30
Silver Spot Price Open: $17.10
Silver Spot Price Close: $16.21
Change in Silver Spot Price: -$0.89
Precious metals spent the entirety of the day on Monday conceding value, mostly thanks to stronger world equities as well as a stronger US Dollar Index. When all was said and done, gold lost more than 25 dollars while silver was down by about 90 cents. Platinum and palladium also began the week moving downward, with losses of about 21 and 18 dollars respectively.
Stocks, Dollar Rebounds to Start Off the Week
Part of the reason why gold and silver were able to make such handsome gains last week was due to the fact that global equities as well as the US Dollar were performing poorly. With volatility on the part of global stock markets growing worse by the day, it is no wonder that the early parts of last week saw safe-haven demand for gold and silver spike to levels we have not seen in a few months.
Today, however, equity markets as well as the Dollar have rebounded nicely and are moving upwards in the lead-up to this week’s all-important FOMC meeting. With the greenback and equities doing better, it should come as no surprise that gold and silver opened up the week continuing to consolidate last week’s gains. Unfortunately, should things remain the same, I imagine that gold and silver may have a rough next few days to contend with.
Market Shifts Attention to FOMC Meeting
This week, though lacking a large amount of economic data, is going to see investors become quite preoccupied. With the Federal Open Market Committee of the United States set to kick off their monthly policy meeting tomorrow, investors are all aboard the speculation train.
As it stands, the overwhelming majority is expecting the FOMC to make some sort of announcement regarding the future of interest rates in the United States. In fact, most investors have grown convinced that the FOMC are going to out and out elaborate upon when interest rates will be raised and how much they will be raised by. Of course, there is no way to either confirm or deny these beliefs, so we will simply have to stay tuned to the outcome of this week’s meeting.
For gold and silver, raised interest rates would mean that investor interest will move further away from safe-haven assets and closer to riskier, more profitable investments. While this is so, an announcement regarding impending interest rate hikes may not have too much of an impact on the precious metals market simply because investors have known about the possibility of raised interest rates for quite some time now. Much like it was with quantitative easing, the fact that such a policy move has been common knowledge for months means that when it is finally announced, it will not come as much of a surprise to investors. Still, it will be interesting to see how the market reacts should any new interest rate information be divulged in the wake of this week’s FOMC meeting on Wednesday afternoon.
Other Noteworthy News
To be fair, the early part of this week is not going to be all that exciting due to a general void of economic data. As such, you will see investors continue to focus on the FOMC meeting as well as the price action of equities, the USD, and crude oil.
Over the weekend, Japan reelected Prime Minister Shinzo Abe, though this is not all that surprising at all. In a press conference held in the wake of his victory, Abe commented that he is still dedicated to fighting the stagnation that the Japanese economy is currently experiencing.
Wrap-Up
As I stated numerous times, the early part of this week is not going to present too much in the way of economic data. Still, investors are preoccupied with speculation regarding the future of interest rates in the US and are hoping that Wednesday’s press conference being held in the wake of the FOMC meeting will shed some light on a topic that has long been the center of investor speculation.
