Gold Spot Price Open: $1,171
Gold Spot Price Close: $1,193
Change in Gold Spot Price: +$22
Silver Spot Price Open: $15.02
Silver Spot Price Close: $15.43
Change in Silver Spot Price: +$0.41
Precious metals posted nice gains to open up the week, capitalizing on poor employment data that was dealt at the end of next week. When all was said and done, gold managed to gain almost 25 dollars while silver improved by just shy of 45 cents. Platinum and palladium also gained on the day, but their gains were kept around 20 dollars apiece.
Yen Makes Big Gains Versus Dollar
When the Bank of Japan announced that they would be instituting negative interest rates on certain deposits on January 29th, the market reacted by becoming incredibly bullish on the greenback. Since then, however, investors seem to be reconsidering this position. To open up this week, we are seeing investors more readily purchase the yen in lieu of the Dollar, driving the greenback to its lowest point against the yen in more than a year.
This worked to gold and silver’s benefit today as both metals made nice strides forward. What we are beginning to see, not only in the US but all over the world, is the attitude of investors becoming increasingly risk-averse. Having a little more than a month to reflect on, 2016 has been anything but a quiet and uneventful year so far. Since the 1st of January, we have seen a lot of tumultuous market activity that is making investors increasingly uncertain as to what they can expect from this year as a whole. This growing level of uncertainty coupled with the fact that metals are relatively cheap at the present moment in time is causing a spike in the level of attention being paid to precious metals. My personal belief is that so long as markets continue acting as unpredictably and erratically as they have so far this year, gold and silver will only continue to benefit.
Crude Oil Begins Weighing on Equities Again
Something else that helped precious metals on Monday was the fact that equity markets across the world were once again being driven down. After performing decently towards the end of last week, crude oil is once again moving downward and is currently trading just below the $30/barrel price point.
Over the weekend, leaders from Saudi Arabia and Venezuela met to talk about what can be done about the current supply-glut that is actively driving the market downward. Unfortunately, early reports were that the weekend’s meeting yielded no real results. Knowing this, investors the world over became scared that the small gains oil made towards the end of last week would be given back immediately. This fear was a major contributing factor to today’s oil price slide. There have been rumors of other meetings involving oil-producing nations, but so far these meetings have either never taken place or brought about no tangible outcome. For gold and silver, the poor performance of oil almost always acts as a weight on spot values. What we are witnessing at present, however, is that gold and silver are benefitting from crude oil’s decline because of the overall uncertainty the commodity’s decline has created.
Wrap-Up
All in all, Monday was a light day from an economic data perspective and gave us little to talk about in that regard. What we did get to talk about, however, is all the price action we have seen on the part of equity markets, the Dollar, and once again, crude oil. This will be a theme that I envision will be repeated a few more times this week as we are not currently anticipating the release of any major economic data points.
