Gold Spot Price Open: $1,215
Gold Spot Price Close: $1,207
Change in Gold Spot Price: -$8
Silver Spot Price Open: $16.65
Silver Spot Price Close: $16.49
Change in Silver Spot Price: -$0.16
After beginning the day and week having posted gains, spot values have since backed down from daily highs to see both gold and silver finish the day with marginal losses. When all was said and done, gold fell by about 8 dollars while silver lost more than 15 cents. Platinum and palladium were able to withstand the stronger USD Index, but gains made were nothing to write home about.
Surprise Rate Decision by China’s Central Bank
Now that the Lunar New Year and all accompanying celebrations are behind us, it is only right that we are dealt some news from Asia. Over the weekend it was reported that, in an effort to ease monetary policy, China’s central bank announced that it would be reducing the nation’s lending and deposit rates. Officially, both rates were reduced by a quarter of one percent, bringing the new one-year lending rate to 5.35% while the one-year deposit rate was changed to 2.5%. Citing growing deflationary price pressures, the central bank of China made it seem like they really had no choice but to lower rates. Lowering rates is an increasingly popular way for central banks to combat slowing economies by encouraging more spending and is now a policy pursued by quite a few countries worldwide.
This news is bullish for raw commodities, including gold and silver, which explains why spot values began the week in such impressive fashion. Unfortunately, however, spot values backed down from daily highs as the USD Index gained strength throughout the late morning and early afternoon.
In other news from China, the overnight hours saw the nation’s latest Purchasing Manager’s Index released, and the numbers were on the upbeat side of things. Compared to a PMI reading of 49.7 in January, February’s figures came in a whole point better at 50.7. Despite the fact that any reading above 50 implies growth, there were conflicting reports claiming that China’s February PMI actually came in under 50. This is perhaps a contributing factor to gold and silver’s late morning losses.
Consumer Prices Continues to Fall in Europe
During the early morning hours, the market was greeted with some more downbeat economic data from the Eurozone. According to official figures, consumer prices across the EU fell by .3% on an annualized basis during February. This is the third consecutive month during which consumer prices fell, and, as you can expect, European investors are growing increasingly nervous with regard to the economic situation of the EU. The only silver lining that can be derived from this morning’s poor European data is that market experts have expected consumer prices to fall by at least .4% on an annualized basis…so things could be worse.
Another bright spot from today’s batch of European economic data was the fact that the overall unemployment rate for the EU fell from 11.3% to 11.2%. While the overall level of unemployment across Europe is worrisome, it is good to see steps in the right direction, even if it is only one, small step.
Wrap-Up
As we look ahead to the rest of this first full trading week of March, investors can expect a boatload of economic data to be made public. In addition to this, there is a strong possibility that geopolitics will once again make their way to the front-burner of the marketplace’s attention. The reason for this is due to the unrest in Russia coming as a direct result of the supposed assassination of a Vladimir Putin opposition party leader. Though Putin and his colleagues have denied any and all involvement in the slaying of the opposition leader, Russians and the world are just a tad suspicious. This, along with a plethora of economic data, will more than likely consumer the market’s attention throughout the week’s duration.
