Gold Spot Price Open: $1,198
Gold Spot Price Close: $1,197
Change in Gold Spot Price: -$1
Silver Spot Price Open: $16.31
Silver Spot Price Close: $16.27
Change in Silver Spot Price: -$0.04
Precious metals spot values hovered between small losses and small gains all day, but by day’s end had to settle for small losses. When all was said and done, gold lost a few dollars while silver was down by almost five cents. Platinum and palladium moved in opposite directions today, but neither metal moved too far from where they opened.
Crude Oil Prices Stabilizing
A factor that has helped stave off some of the selling pressure facing precious metals is the fact that crude oil prices are now in the midst of a four week uptrend. What’s more, the spot value of crude oil hit a 4-month high today prompting many investors to believe that a market bottom is in place. Because of this growing belief, more and more investors are hitching to oil and other associated commodities in order to take advantage of gains like we have seen the past few weeks.
Still, even though the prospect of crude oil looks pleasant today, the fact of the matter is that that could all change in a hurry. The Iranian nuclear talks, of which will pick back up this summer, could lead to Iranian crude oil flooding an already supply-glutted market. Though the present moment in time is seeing crude oil partake in a nice hike upward, it should be noted that this by no means guarantees that the price of oil will stay on the up and up.
The US Dollar Index was once again lower today, giving investors even more reason to believe that crude oil might have established a market bottom. Because the Dollar and crude oil are so closely related (via an inverse relationship of sorts), the market now has ample room to believe that the greenback may have established a market top. This could be good news for metals, but is looking more like the good news that limits selling pressure rather than the good news that prompts physical purchases.
Some Hawkish Monetary Policy
Earlier in the week we were discussing James Bullard and his desire to have interest rates hiked sooner than next year. Today, the monetary policy hawks were given even more fuel in the form of a heavily upbeat Philadelphia Fed business survey. This news only adds to the, once again, growing belief that this summer will bring about the first interest rate hike in the last few years. Today’s news put a damper on precious metals and contributed decently to losses incurred.
In case you were unaware, raised interest rates, or the idea of them, hurt precious metals because higher interest rates will naturally cause investors to ditch safe-haven gold and silver in search of more rewarding interest-bearing assets. It will be interesting to keep an eye on the interest rate hike debate as we head deeper into the Spring and eventually into the Summer.
Wrap-Up
In other news, a recent theme in the marketplace has been the falling nature of European bond yields. German bond yields in particular have been falling, and being that they are seen as the safest in the EU, investors now worry how this might affect the ongoing quantitative easing going on across the Eurozone. As we head into the final day of the week, it will be interesting to see what unfolds in Europe. In addition, it will be intriguing to see if metals can bounce back after a rough first four days, or if this week will be more or less a total loss.
