Gold Spot Price Open: $1,221
Gold Spot Price Close: $1,210
Change in Gold Spot Price: -$11
Silver Spot Price Open: $17.19
Silver Spot Price Close: $16.90
Change in Silver Spot Price: -$0.29
After pushing forward for the past few days, Tuesday saw precious metals experience a bit of a corrective pullback following recent gains. When all was said and done, gold lost a little more than ten dollars while silver declined by close to thirty cents. Platinum and palladium both failed to do all that much moving today and finished the day in about the same spot as where they started.
USD Index Bounces Back
After not doing so hot for the past few days, the USD Index managed to make consistent gains all day on Tuesday. When markets finally closed, the greenback had advanced by more than 1% against a basket of rival currencies. Despite it being believed by some that the US Dollar has put in a near-term market top, others believe the greenback is ready for another rally. Of course, it is going to take a recovery on the part of US economic data for a recovery on the part of the Dollar to seem realistic.
It’s important to keep in mind, however, that despite the Dollar’s struggles over the past few weeks, it is still in a nice standing and is just a few cents from being on par with the Euro. For gold and silver, the prospect of another rally on the part of the Dollar is not good news. The USD and metals have had an especially rigid inverse relationship as of late, and a rally would likely only pressure spot values.
In other currency news, it was reported today that Australia’s central bank decided not to slash its main interest rate. This was a somewhat surprising move that ushered in a nice rally on the part of the Aussie Dollar. This rally, in many respects, put a bit of a damper on the USD’s upbeat day.
IMF Study Hints At Low Rates for Some Time
An International Monetary Fund report published today predicted that the financial crisis of 2007-2009 will likely hurt the global economy for years to come. Though it didn’t outright say it, the report heavily hinted that the IMF thinks low interest rates for the foreseeable future are the key to full economic recovery. With the United States’ potential hiking of interest rates perpetually in the news, this IMF report offers a viewpoint that is drastically different than that of most investors.
While rate hikes are still expected sometime soon, they are now believed to be destined for sometime next year. As economic data from the US continues to lag, rates in the US will remain as low as they have been for the past few years. With all that being said, it is widely expected that economic data from this part of the world will begin to improve, though only time will tell.
Wrap-Up
All in all, Tuesday was a fairly slow day across the global marketplace. Apart from the Dollar’s resurgence, we also saw crude oil prices tick up a bit. Don’t look now, but after hitting multi-year lows little more than a month ago, crude oil prices have slowly but surely been working their way back to respectable levels. While consumers at the pump are not happy about this, precious metals investors should be. Looking ahead to the last few days of the week, I expect that investors will keep a close eye on the Dollar to see if it has the momentum to move even higher.
