Gold Spot Price Open: $1,272
Gold Spot Price Close: $1,275
Change in Gold Spot Price: +$3
Silver Spot Price Open: $17.14
Silver Spot Price Close: $17.11
Change in Silver Spot Price: -$0.03
Precious metals ended the week in poor form and are heading into the weekend posting a fairly sizeable weekly loss. When all was said and done on Friday, gold gained 3 or 4 dollars while silver fell by another 3 cents. Platinum and palladium finished the day mixed, but neither metal moved too far from where it began the day.
US Retail Sales Better Than Expected
On a day when many thought gold and silver might rally, we are actually seeing the opposite happen as retail sales for the month of April were reported as being much better than expected. Naturally, any good piece of economic data tends to work against gold and silver, and that is exactly what happened today.
To be fair, this 5-day trading session has been devoid of many markets-moving pieces of economic data, so it was nice to see investors engaged on this final day of the week. Officially, it was reported that month on month retail sales in April were up by more than 1.2%. Most expectations called for a rise in retail sales of just under 1%, so today’s data was definitely welcomed with open arms by people who have grown a bit uneasy with regard to the tone of recent US economic data.
The European Union also released some economic data during the early morning hours as it was reported that 1st Quarter GDP was up by .5% and up by 1.5% on an annualized basis. Though these figures were just slightly short of admittedly lofty expectations, investors were generally happy about what was reported. Naturally, these two aforementioned data points very much work against precious metals and that was shown in the losses posted on this final day of the week.
What hurt gold the most on Friday was the fact that the US Dollar Index made nice gains to finish off the week. Because of precious metals’ typical inverse relationship with the greenback, it is always going to be difficult for metals to gain when the Dollar does well.
Fears of Crude Oil Oversupply Abound Again
During the first parts of this week, we were hearing about crude oil prices moving upward by small margins thanks to a raging wildfire burning through Canada’s Alberta province. Because of the fire, Canada was forced to reduce its daily output of crude oil by more than 1 million barrels. This was because pipelines and other methods by which oil traverses the country were operating on modified scheduled as to avoid complications created by the fire.
Just as soon as investors began taking into consideration the fact that Canada was producing less fuel on a daily basis, however, reports streamed in that Mother Nature took over and reduced the severeity of the blaze. Though still very much a real concern and danger for millions, the wildfire has loosened its stranglehold on Canada’s fuel industry. As we head into next week, the Alberta wildfire will remain in the headlines, though the impact it has on the spot value of crude oil is something that will completely depend on whether the blaze intensifies or not.
Wrap-Up
As was mentioned on Thursday, this week has been quite slow from an economic data standpoint. In fact, arguably the most important piece of data dealt this week—the US retail sales report from April—was just dealt today. As we look ahead to next week, it will be interesting to see in what direction gold and silver head. Of course, so long as the US Dollar remains as strong as it is at the present moment, any substantial, sustainable gains on the part of gold and silver are going to be difficult to come by.
