Gold Spot Price Open: $1,194
Gold Spot Price Close: $1,231
Change in Gold Spot Price: +$37
Silver Spot Price Open: $16.29
Silver Spot Price Close: $17.15
Change in Silver Spot Price: +$0.86
Precious metals made solid gains across the board on a day when investors sought to rid themselves of what are seeming like increasingly risky equity investments. When all was said and done, gold gained more than 35 dollars while silver’s gains came in at close to a single dollar. Platinum and palladium also saw solid gains today, both over the ten dollar threshold.
Investors Get Rid Of Stocks As Fears Mount
With investors considering the recently poor strings of economic data from Europe and China, worries with regard to an overall global economic slowdown are beginning to become very real. In addition to weak data from China fueling an equity sell-off, crude oil prices are continuing to move downward after losing nearly 4% on Monday.
With regard to oil, the fear is that a supply glut will continue to further degrade prices. While your average customer at the pump is ecstatic about the falling prices, lower crude oil prices are beginning to have a negative impact on the wider global economic outlook. With that said, however, some market analysts are anticipating that the fewer dollars being spent by Americans at the pump will translate into more spending at retail locations during this holiday season. Perhaps that might be the silver lining in this whole situation.
Safe-Haven and Bargain-Hunting Buying Dominates
Now that equities across Europe, Asia, and the Americas have traded downward for two consecutive days, investors are beginning to worry about what the rest of the week and upcoming weeks have in store for stock markets.
Though there are plenty of people who think that this week’s sell-off of stocks is nothing more than temporary, others feel as though the air has left the stock market bubble. There is no way to say for sure whether stocks will recover from today and yesterday’s losses, but what we do know is that their current downward trend has been perfect for precious metals. Not only is safe-haven demand beginning to pick up, but because prices are so low, that safe-haven demand combined with bargain-hunting is really seeing spot prices surge forward.
Now, like last week, the real test will be to see whether metals are able to retain today’s gains as we head deeper into the week. At present, it seems as though gold and silver are on a nice, solid upward trend, but there is no way of guaranteeing that such will be the case come a few days from now.
Merkel Seeks to Retain Control of EU
Conservative German Chancellor Angela Merkel is well on her way to retaining control of the best economy in Europe. Just today, it was announced that Merkel was elected by her colleagues as leader of the Christian Democrats (CUD) party. Though national elections are not being held until 2017, Merkel received more than 95% of the votes to lead her party into the next election period. At this point in time, most political experts agree that it is going to take some sort of miracle in order for Merkel to not win re-election to the position of Chancellor.
It seems as though Germany is perfectly content with Merkel at the helm of the government too, as a recent poll showed that more than 50% of German citizens are in favor of a re-elected Angela Merkel.
For the global economy, this news did not have much of an immediate impact, but it is important nonetheless. As we move forward through the end of this year and into next year, the German (and all EU economies) economy will be in the spotlight as the world anxiously awaits the EU’s rise out of this current economic downturn. With Merkel leading things, the bulk of the responsibility, should things continue along this poor economic path, will fall directly on her shoulders. For this reason, it is very interesting to see what the next few months have in store for Europe’s largest, top-performing economy.
Wrap-Up
Despite the first two days of this week not bringing about too too much in the way of economic data, we have witnessed some decent price action on the part of both gold and silver. Now, investors the world over will continue to pay close attention in order to see whether metals can retain this week’s gains, or if profit-taking and other factors will drive prices back downward. For a slow week, we sure do have a lot to look forward to over the next few days.
