Gold Spot Price Open: $1,229
Gold Spot Price Close: $1,209
Change in Gold Spot Price: -$20
Silver Spot Price Open: $17.78
Silver Spot Price Close: $17.13
Change in Silver Spot Price: -$0.65
Precious metals suffered a fairly hefty setback on Tuesday thanks, in large part, to a stronger US Dollar as a result of some unexpected economic data. When all was said and done, gold lost about twenty dollars while silver declined by well over 60 cents. Platinum and palladium both finished the day down as well, but platinum was the bigger loser of the two with losses nearing $30.
April Housing Data Beats Expectations
For the better part of the last few weeks, there have been few days where I failed to make mention of the United States’ poor economic performance. As recently as last week, report after report was dealt and painted a picture of a US economy that was not realizing its lofty growth goals. Though this week was widely expected to be quite slow, today brought about an economic data point that took the global marketplace by surprise.
According to data released today, housing starts across the United States in April moved up at the fastest pace in more than 7 years. Speaking with regard to how this piece of data fits into the interest rate hike puzzle, Richard Cochinos of Citi said, “It is good for the growth outlook. The question is whether or not people will buy the houses they are building and whether or not consumption will hold up in the U.S. That is going to be absolutely necessary for the Fed to see.” Basically, Cochinos is making the same statement we have made plenty of times, and that is that interest rate hikes are going to, and have always depend(ed) on the aggregate of US economic data, not solely a report or select grouping of reports.
US Dollar Bounces Back Strongly
After having a rough go of things last week, the US Dollar opened up Tuesday’s trading session by posting almost immediate gains. By the time the dust settled on Tuesday the USD had moved forward by almost 1.25%.
Realistically, the Dollar’s gains today can be attributed to a combination of the upbeat housing data and a decline of the Euro. Still, some market experts see today’s housing data and recently upbeat employment figures as a reason behind why the Dollar might stabilize, or even potentially make a move higher. While this much remains to be seen after only a single day of impressive gains, the Dollar has always been expected to surge forward this year and make massive gains against the Euro.
Wrap-Up
Today has been an interesting day simply because it is to the contrary of what has been going on across the global marketplace recently. Gold and silver have finally retreated after their runs forward last week, so it will be interesting to see if we will continue to see losses through tomorrow and the rest of the week. Tomorrow is arguably the most important day of the week seeing as the minutes from the FOMC’s latest meeting are due out. Though I am of the belief that tomorrow’s minutes will be more of a non-factor than anything else, it will be interesting to see what exactly specific members of the Fed had to say about how they feel about the US economy, recent economic data, and all the other factors affecting the Fed’s potential hiking of interest rates.
