Gold Spot Price Open: $1,252
Gold Spot Price Close: $1,269
Change in Gold Spot Price: +$17
Silver Spot Price Open: $17.33
Silver Spot Price Close: $17.55
Change in Silver Spot Price: +$0.22
Gold and silver both moved sharply upward as soon as markets opened on Thursday thanks to some events that unfolded the day before. When all was said and done, gold posted gains of roughly 17 dollars while silver climbed upward by more than 20 cents. Platinum and palladium were both up on the day as well, with platinum alone picking up more than 20 dollars while palladium had gains of little more than ten.
US Economic Growth Slows in 2016 Q1
Though it should not come as much of a surprise, economic growth in the US was not nearly as robust in the first three months of the year as was expected. Thanks to the data missing the mark today, gold and silver were boosted by fears that the global economy will not recover at any point in the near future.
Officially, the US economy expanded in the first quarter at its slowest pace in about two years. Not only were consumers seen spending less money, employers and companies were seen cutting spending as well. For US corporations, it’s the outside factors like slow growth in China and Europe that are really causing the decrease in spending. In the minds of these companies, if places like Europe and China are experiencing increasing weakness, the United States may be next. Really, it is more precautionary than anything else, but it goes to show that no matter how strong the US economy is, we are still, to some extent, at the whim of how the rest of the world is performing.
On an annualized basis, the US GDP grew just .5% during the first quarter of the year. When you compare this to growth of 1.4% that was recorded during 2015’s final three months, you can see why the data is being viewed as markedly disappointing. The real disappointment is that consumer spending has fallen off considerably despite gasoline and other energy costs that remain quite low in comparison to recent years. When you add this data to some corporate earnings reports that, admittedly, missed the mark this week, it’s the perfect situation for gold and silver to make some gains. Now it will be interesting to see if today’s gains can be sustained through the final day of the trading week.
FOMC, BoJ Hold Positions
It was reported yesterday that the Fed was not going to change monetary policy at this month’s meeting. Despite this, there was a strong contingent of investors who were under the impression that the BoJ was going to announce today that they would be immediately expanding their current monetary policy of quantitative easing measures. When the BoJ’s meeting concluded, however, no expansion was announced and that took the market by surprise.
The fact that Japan did not expand its quantitative easing monetary policy is something that plays in the favor of the Japanese Yen vs. the US Dollar. Today the Dollar did not perform overly well like we have seen the past few weeks and this too played in the favor of gold and silver.
Wrap-Up
All in all, today was a very beneficial one for gold and silver. Most outside markets were positioned in such a way that gold and silver had no problems moving upward and that is exactly what happened. Now it will be intriguing to see what happens on Friday, because at the present moment in time metals are looking like they are going to post weekly gains. Of course, if stocks and the Dollar bounce back those gains may not be such a sure thing.
