Gold Spot Price Open: $1,162
Gold Spot Price Close: $1,156
Change in Gold Spot Price: -$6
Silver Spot Price Open: $15.73
Silver Spot Price Close: $15.55
Change in Silver Spot Price: -$0.18
Precious metals extended their downward trend on Wednesday and are slowly but surely piling up losses this week. When all was said and done, gold lost five dollars while silver lost close to twenty cents. Platinum and palladium both lost on the day as well, both by more than ten dollars.
US Stocks Make Gains After Tuesday’s Sell-Off
After stock indexes in the United States sold off on Tuesday, they were seen making some mild gains on Wednesday. With the US Dollar Index doing incredibly well in recent days and stocks following suit, it came as no surprise that stocks folded under the pressure yesterday. The timing of interest rate hikes in the US has recently been called into question and is and will continue to be a top concern for investors.
According to JJ Kinahan, a chief strategist at TD Ameritrade, “When you have a market entirely driven by news and data you’re going to have more intraday volatility. We’re not growing at the pace that everyone is expecting it to grow and that puts the Fed in a tough situation.” For months now, the prospect of raised interest rates is something that has had the market on edge, but during that same amount of time we really haven’t found out anymore concrete information regarding rate hikes. A report published by the Wall Street Journal today indicated that, by June, the Fed will be much more transparent with their views regarding interest rate hikes. This will definitely impact the market, though it is still too early to tell exactly how.
EU Bond Yields At/Near Record Lows
Beginning on Monday, along with QE, was a trend on the part of European bonds which saw their yields drop, and drop, and drop to the point where they are now at multi-month and multi-year lows. In Germany, 10-year bond yields hit a record low of .2%, while the shorter 2-year Schatz bond was seen trading at record lows of -.24%. In addition to bonds from Germany trading at or near record lows, bonds from other EU countries are doing the same.
For investors, German bonds are seen as a safe-haven and will likely continue to receive the type of attention we have seen this week for some time to come. Other yields are falling and being attributed to the fact that, as part of the current QE initiative, the ECB plans on buying sovereign bonds. As the week moves forward and the lack of economic data persists, I imagine the market will continue to focus on anything and everything stemming from the collective EU economy.
Chinese Industrial Production Lagging
A report from China released during the overnight hours indicated that, through the first two months of 2015, industrial production was up 6.8% on an annualized basis. Retail sales through the first two months of this year were up by 10%, and though it may seem hard to believe, both of these figures were far better than those of other countries. China is historically known as an economy that outperforms the world, so while these figures may seem upbeat, they are far from that.
Wrap-Up
As was made painfully clear, this day and week have been incredibly quiet and lackluster from an economic data standpoint. As a result of this, investors have been finding pretty much anything to focus their attention on–and this week has seen investor attention move to global equity and currency markets. Some economic data is expected through the last two days of the week, but I do not think that it will have all that much of an impact on the market.
