Gold Spot Price Open: $1,195
Gold Spot Price Close: $1,199
Change in Gold Spot Price: +$4
Silver Spot Price Open: $17.02
Silver Spot Price Close: $17.05
Change in Silver Spot Price: +$0.03
Precious metals traded sideways for most of the day on Wednesday, but were still able to finish in the green to continue along their recent uptrend. When all was said and done, gold managed gain about 4 dollars while silver improved to the tune of three cents. After a few days of losses to open up the week, both platinum and palladium were able to add a few dollars to their spot values today.
Dollar Continues to Slide
For yet another day, the US Dollar was seen moving downward against most of its rivals. The USD Index, which measures the Dollar against a basket of rival currencies, fell by nearly 3 quarters of a percent today and effectively extended its already mounting run of losses.
After falling below $1 last week, the Euro rose and momentarily eclipsed $1.10 today on some downbeat US economic data. According to the US Commerce Department, non-defense capital goods orders (excluding those for aircraft) were down by nearly 1.5% a month ago. This report, like so many in recent history, has shown that the growth rate of the US economy during the early parts of 2015 is only a shadow of what it was expected to be. This gave investors even more reason to rid themselves of the greenback and likely contributed to gains made by precious metals today.
According to Mark McCormick, currency strategist at Credit Agricole, “The dollar is overbought and it’s expensive, so now any U.S. data weakness we have leads investors to square up overextended dollar positioning.” With next week and the plethora of economic data that it will bring, the US Dollar is under threat of falling victim to an even bigger sell-off. For precious metals, this is potentially very good news.
Bond-Buying Already Having Positive Impact on European Economy
Only a few weeks ago, the market was finally made aware that the European Central Bank’s bond-buying program was finally set into action. Despite it being generally agreed that it is too early to tell whether bond-buying on the part of the ECB will be enough to repair the EU economy, governing council member Erkii Liikanen seems to think differently. According to him, “Monetary-policy decisions and the measures taken have already had a clear, positive impact on the economic outlook. The ECB is committed to delivering on its primary mandate: Price stability.”
The ECB will continue spending $66 billion/month on government debt, bonds, and asset-backed securities in an effort to bring the price level of the European Union economy back up to snuff. Liikanen continued, saying, “The large-scale asset purchases will be carried out at least until end-September 2016 and in any case until the Governing Council judges the pace of inflation is returning sustainably to a level in line with the price-stability objective.”
As you are probably well-aware, the global marketplace will continue keeping a close eye on Europe over the course of this year. Looking in poor shape at present, many think that the ECB’s current monetary policy will, in the end, be able to revive the large, collective ECB economy.
Wrap-Up
As we look ahead to the final few days of the week, it is clear to see that there will not be many pieces of economic data for investors to talk about. The one exception to this will be, of course, the weekly jobless claims report from the United States. Apart from that, however, investors will more than likely be content to hold their positions until next week and the following week, when boatloads of monthly and quarterly economic reports will be made public.
