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    JM Bullion Gold and Silver Market Update (5/17/16)

    Gold Spot Price Open: $1,276

    Gold Spot Price Close: $1,282

    Change in Gold Spot Price: +$6

    Silver Spot Price Open: $17.21

    Silver Spot Price Close: $17.22

    Change in Silver Spot Price: +$0.01

    Precious metals opened up the day on Tuesday much better than they did on Monday after some US economic data was dealt earlier in the day. When all was said and done, gold gained about six dollars while silver managed to add a few cents. Platinum and palladium did not perform as well as gold and silver, but neither of those two metals moved too drastically downward.

    Consumer Prices, Industrial Production Up More Than Expected in April

    US stocks were mostly downward at the beginning of the day on Tuesday thanks to some pieces of economic data that came back better than expected. Industrial production saw its biggest monthly leap forward in nearly ten years and the first move forward in 3 months. Officially, April’s industrial production was up .7% month on month. Considering expectations were for a gain of just .3%, it is easy to see why today’s data is being touted as wholly positive.

    Leading the way for industrial production was utility production, which grew by almost 6% in April. Specifically, electricity production was up during April by the biggest margin in almost a decade. While all of this data is fine and good, industry analysts are calling April’s growth unsustainable. In general, industrial production around the world is slowing down and many people are viewing April’s data as a fluke more than anything else.

    As far consumer prices, they were up by .4% month on month during April. This was slightly better than the .3% growth that was expected for consumer prices in April. All in all, Tuesday’s data worked to drive US stocks downward and really ended up supporting gold and silver. Still, the support given to precious metals was marginal and does little to win back the losses that were incurred last week.

    Crude Oil Pauses After Early Week Gains

    After making some nice strides forward on Monday, the spot value of crude oil took a few steps backwards on Tuesday. Thanks to profit-taking crude oil began the day on Tuesday conceding some of the value gained a day earlier. Still, with production interruptions still very much a factor across the global crude oil landscape, there are plenty of people who think that crude’s spot value is bound to move higher.

    In fact, there are some people who think that crude oil will hit $50/barrel before long. For the past few months the $50 threshold has been a difficult one for oil to surpass and it seems as though a breakthrough might finally be realized.

    We are well-aware of the fact that the ongoing Alberta wildfire has been limiting production of oil in Canada, but Nigeria is seeing their production cut considerably by what is being deemed a sabotage of the country’s oil infrastructure. This is ongoing and has seen the daily output of oil fall from more than 2 million barrels to just over 1 million. These production cuts are not likely to be cured overnight and, as such, most analysts are expecting supply shortfalls to be a mainstay for the foreseeable future. This is something that lends support to precious metals going forward and is a reason behind the gains realized today.

    Wrap-Up

    Tuesday offered up a bit more activity than Monday mostly thanks to a few pieces of economic data being dealt, and gold and silver were lifted up out of the their respective slumps. Gains made by metals were only marginal, but it was a nice break from the string of consecutive losing days. As we head into the middle parts of the week it will be interesting to see what kind of impact today’s data and any additional pieces of data have on gold and silver spot values.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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