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    JM Bullion Gold and Silver Market Update (2/14/17)

    Gold Spot Price Open: $1,228

    Gold Spot Price Close: $1,230

    Change in Gold Spot Price: +$2

    Silver Spot Price Open: $17.92

    Silver Spot Price Close: $17.92

    Change in Silver Spot Price: NO CHANGE

    Precious metals did not move all that much on Tuesday despite some commentary from Janet Yellen regarding rate hikes and fiscal policy. When all was said and done, gold gained about two dollars while silver finished the day right where it started. Platinum and palladium gained on the day, but neither metal really added all that much value.

    Yellen Speaks Positively About US Economy

    Speaking in front of Congress today, Janet Yellen made it very clear that she has faith in the US economy, and that the economy is continuing to grow. While that is so, the Chair of the Federal Reserve was sure to speak vaguely with regard to further rate hikes during 2017.

    There was a lot said by Yellen, but the big takeaway was when she said, “Since my appearance before this Committee last June, the economy has continued to make progress toward our dual-mandate objectives of maximum employment and price stability. At its meeting that concluded early this month, the Committee left the target range for the federal funds rate unchanged but reiterated that it expects the evolution of the economy to warrant further gradual increases in the federal funds rate to achieve and maintain its employment and inflation objectives.”

    That last sentence is the big takeaway for precious metals investors. Rate hikes have been out of focus for a little while, but Yellen reiterating that they are likely to happen is something that will do spot values no favors whatsoever. Even though Yellen maintained that rates will eventually be hiked, she alluded that it would not be smart for the FOMC to wait too long. In all, Yellen’s comments today support the growing belief that the next rate hike will come sometime around June or July. This is a long-term factor that will more than likely weight on precious metals. Still, the fluid nature of the US economy means that nothing is guaranteed; economic conditions can change in the blink of an eye.

    US Producer Prices Rise in January

    US producer prices rose in January by a seasonally-adjusted .6%, which defeated expectations by a good bit. Royce Mendes, of CIBC Economics, commented on the data by saying, “While energy prices were a major contributor, they weren’t the whole story. Even after stripping out food and energy, the index was up 0.4%. That could raise market expectations for tomorrow’s CPI print, although PPI is not generally good leading indicator of monthly changes in consumer prices.”

    The data was mostly overlooked, but did not do precious metals any favors at all. Stock markets in the US were gaining across the board, as was the USD Index. So long as both of these are on the up and up, precious metals are going to have a tough time gaining. This is something we will continue to keep a close eye on as the rest of the week plays out.

    Wrap-Up

    All things considered, Tuesday brought about a good bit of information for investors to mull over and discuss. Janet Yellen did not necessarily say anything that was unexpected, however her words are always going to be hawked over by investors. At the end of the day, she did precious metals no favors by reinforcing the belief that rates will, in fact, be raised this year. As we look forward to the rest of the week, it will be interesting to see if stocks and the Dollar continue to gain, or if they will back off and give precious metals room to regain some of their losses.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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