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    JM Bullion Gold and Silver Market Update (5/20/16)

    Gold Spot Price Open: $1,257

    Gold Spot Price Close: $1,255

    Change in Gold Spot Price: -$2

    Silver Spot Price Open: $16.53

    Silver Spot Price Close: $16.50

    Change in Silver Spot Price: -$0.03

    While the week, as a whole, has not been too kind to precious metals, Friday saw gold and silver stabilize a bit. When all was said and done, gold ended up losing value, but only about two dollars. Silver also lost value, but conceded only a few pennies. Platinum and palladium didn’t do much moving, but what little movement was recorded was mostly in the upward direction.

    Existing Home Sales Jump Up in April

    As far as US economic data is concerned, this week was wholly positive. This is something that does well to support the idea that the Fed will be raising interest rates come their June meeting. Friday brought with it more upbeat economic data thanks to a report showing that sales of existing homes rose in April by margins that were larger than anticipated.

    All in all, the US housing market is in a nice position and seems to be one of the strongest sectors of the US economy; a sentiment that is supported by today’s data. According to the National Association of Realtors (NAR). Sales of existing homes moved upward by 1.7% month on month. This brings the annualized rate of existing home sales to 5.45 million units. Expectations called for the annualized number of units sold to be just below 5.4 million units.

    Lawrence Yun, chief economist for the NAR, commented on today’s data and the housing market in general by saying that April’s data was “primarily driven by a convincing jump in the Midwest, where home prices are most affordable, sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home.”

    If the housing market continues to improve as it has been for much of the past year, this will only lend more credence to the belief that interest rates will be risen by the conclusion of the FOMC’s June meeting.

    Oil Prices Remain Elevated

    This week was a bit different than what we have experienced throughout much of the year because we have seen crude oil spot values rise at seemingly every turn. Though spot values retreated a bit on Friday, it is quite clear that the commodity still has plenty of momentum. The reason for this newfound momentum is a combination of a few different disruptions to the global crude oil supply, one in Canada and one in Nigeria. With no clear-cut end to the disruptions in sight, investors are weighing their next moves carefully. After all, crude oil has been on the decline for much of the year, so the current scenario is nothing like we have experienced in the past 5 or more months.

    Between wildfires in Canada and a sabotage on the Nigerian oil industry, the world is seeing a daily output of crude oil that has fallen by nearly 2 million barrels.

    Momentum is still very much on the side of oil spot values, but the strengthening of the greenback in response to an increased likelihood of rate hikes is something that will actively keep oil subdued to some extent. As we look ahead to next week, this is a situation that will be closely eyed as investors are now curious to see just how far forward crude oil can venture. The strength of crude oil has done little to help gold and silver this week, and I imagine that this will continue to be the case so long as rate hike talks dominate the global landscape.

    Wrap-Up

    Friday was one of the more uneventful days of the week, but it did see precious metals stabilize a bit, which is definitely good news. As we look forward to the last full week of May trading, it will be interesting to see if investors grow any more or less confident in a June rate hike. As it stands, investors the world over are very much confident that rates will be risen next month, though this is not the first time such has been the case.

    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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