Gold Spot Price Open: $1,228
Gold Spot Price Close: $1,235
Change in Gold Spot Price: +$7
Silver Spot Price Open: $18.05
Silver Spot Price Close: $17.95
Change in Silver Spot Price: -$0.10
Precious metals bounced back to some extent on Wednesday amid more Janet Yellen commentary and Trump talk. When all was said and done, gold tacked on around 7 dollars while silver actually lost roughly 10 cents. Platinum and palladium added value on the day, with both metals picking up a little more than 5 dollars apiece.
Trump Talks Taxes
Something that has recently come to the aid of global stock markets—but especially US stock markets—has been President Donald Trump’s allusion to the potential institution of massive tax cuts for individuals and businesses. All throughout his campaign, Trump commented time and time again how he is going to slash taxes to provide relief for what has been described as a struggling middle class.
The past few weeks brought about the first time Trump has, as President, discussed the actual implementation of such tax cuts. On Wednesday, Trump was quoted as saying that his “massive” tax initiative is going to be unveiled sometime in the “not too distant” future. The comments were made as Donald Trump spent the morning hours of Wednesday meeting with CEOs of major retail companies.
Once again, however, stocks in the US responded positively to Trump’s remarks despite there being very little concrete information known about what the tax cuts will include and when they will be implemented. All 3 of the major US stock indexes (Dow Jones, S&P 500, and Nasdaq) hit record highs during trading on Wednesday. As you could have probably guessed, this is something that did not do precious metals any favors whatsoever.
Yellen Continues Congressional Testimony
After meeting with the Senate Banking Committee on Tuesday, Fed Chair Janet Yellen addressed the House of Representatives on Wednesday. As she did a day earlier, her remarks in front of the House showed that she is confident in the current trajectory of the US economy. Pointing to the improving labor market and other factors, Yellen did a good job of explaining just where her optimism is coming from.
Once again, it was difficult for investors to take too much away from Yellen’s remarks for the sole fact that she remained as ambiguous as always. Though she reiterated her belief that interest rate hikes should be approached with caution, she also made it clear that it would not be wise for the FOMC to wait too long to pull the interest rate hike trigger. As a result, Yellen’s comments on Wednesday were more or less a non-factor for investors.
While Yellen expressed caution with regard to the speed at which rates are hiked, Boston Fed President Eric Rosengren spoke on Wednesday and maintained that rates may need to be raised at least 3 times, if not more, this year. His reasoning comes as a result of his thinking that GDP in the US will grow more drastically than expected over the next year or so. Though Rosengren’s comments did not exactly shock the global marketplace, they represent something that investors should begin thinking about now, because it isn’t going to be too long before rate hike speculation gets back into full swing.
Wrap-Up
All in all, Wednesday was yet another quiet day across the global marketplace. This week has thus far not brought about much in the way of markets-moving economic data, and there is not much out there to suggest that we will be seeing a major influx between now and the end of the day on Friday. What will be interesting to see, however, is whether or not precious metals can turn the week around and post another batch of 5-day earnings.
