Gold Spot Price Open: $1,195
Gold Spot Price Close: $1,203
Change in Gold Spot Price: +$8
Silver Spot Price Open: $16.29
Silver Spot Price Close: $16.39
Change in Silver Spot Price: +$0.10
Precious metals managed to gain some of the value lost over the last week today. When all was said and done, gold gained about 8 dollars while silver’s gains were closer to ten cents. Platinum and palladium also gained today, but gains were around 8 dollars for both metals.
James Bullard Comments on Interest Rate Hikes
In a somewhat surprising move today, James Bullard, president of the St. Louis Federal Reserve, cited improving US employment and an improving US economy as reasons why rate hikes should take place sooner rather than later. He went on to say that asset bubbles could be created should the Fed keep rates at their current level for too much longer.
As for his expectations for the US economy and employment situation going forward, Bullard anticipated that the overall unemployment rate is expected to dip in the 4% range before long. Further, he anticipated that the overall growth of the US economy will move forward at a steady 3% growth rate through the rest of the year.
In his remarks, Bullard said that “now may be a good time to begin normalizing US monetary policy so that it is set appropriately for an improving economy over the next two years.” He went on to say that “even with some normalization, monetary policy will remain exceptionally accommodative.”
Draghi Speaks Positively Regarding EU Economic Recovery
During the early morning hours of Wednesday, European stocks were posting solid gains. Those gains were held on to by the end of the day thanks to a speech made today by ECB president Mario Draghi. During his remarks, Draghi commented that he is especially impressed by the rate at which the Eurozone economy appears to be recovering. He maintained that the first few months of quantitative easing across the region have been an early success story, and that he is expecting much of the same as this year plays out.
In his remarks, Draghi said, “Looking ahead, we expect the economic recovery to broaden and strengthen gradually. Domestic demand should be further supported by ongoing improvements in financial conditions, as well as by the progress made with fiscal consolidation and structural reforms.” So long as Europe’s fortunes remain upbeat, the shorter it is expected that quantitative easing will remain in effect. Though, with that being said, it is still far too early to label Europe as a part of the world that is out of the economic doldrums.
US Treasury Yields Tick Lower On Retail Sales
Thanks to a weaker than anticipated retail sales report from the US in March, US 10-year Treasury note yields fell below 1.9%. Yields for 30-year notes also fell, to around 2.52%.
US economic data for today was equally as unimpressive as yesterday’s seeing as March industrial production, on an annualized basis, fell by more than half a percentage point. Keeping with the sour data from the US, mortgage applications from last week fell by more than 2% from the week before according to the Mortgage Bankers Association.
This falls in line with a recent run of poor economic data from the United States. Despite James Bullard’s expectations for a continually improving US economy, early signs through the first 4 months of this year have been anything but stellar.
Wrap-Up
Last week was quite boring and lacking from an economic data standpoint, but this week has so far been a change. Today we saw some very influential central bankers make some comments that are sure to have an impact that extends beyond today’s trading session. As we look forward to the last few days of the week, it will be interesting to see if metals can at all build off today’s small gains.
