Gold Spot Price Open: $1,289
Gold Spot Price Close: $1,297
Change in Gold Spot Price: +$8
Silver Spot Price Open: $17.47
Silver Spot Price Close: $17.52
Change in Silver Spot Price: +$0.05
Gold and silver rode inaction on the part of the Federal Reserve to end the day Wednesday having made nice gains. When all was said and done, gold gained 8 dollars while silver appreciated by just 5 cents. Platinum and palladium didn’t do poorly on the day, but neither metal finished too far from where it began the day.
Fed Maintains Current Interest Rate Levels
As expected, the conclusion of the Federal Reserve’s policy meeting brought about no changes to current monetary policy. Interest rates were kept at current levels and many voting members of the FOMC anticipate that this may remain the case for quite some time. As opposed to what expectations were this time last year, when people thought that we would see multiple interest rate hikes, investors will now be content if we even see 1 or 2 more. Of the polled voting members of the FOMC, the general consensus was that we will see 2 more .25% hikes before 2016 is brought to a conclusion. This news alone gave gold a boost today as well as a lot of underlying support going forward.
Now that we are at the halfway point of June, we can reflect on a 2-week run that has seen gold’s spot value gain more than 5%. According to Steven Dunn, of ETF Securities, the Fed’s decision “…sends a good news story for gold that you might get a weaker dollar on a lack of support from a rise of interest rates.”
Most polls show that investors put the likelihood that rates will be raised in July at just 10%. When June was just getting started, that same figure was nearing 60%. It is amazing how quickly things can change across the global marketplace, as witnessed by only the last 15 days. As for what the future holds for gold and silver, that much will rely heavily on whether the United Kingdom decides to leave the European Union or not. If the UK does, in fact, leave like so many people believe they will, this will likely provide even more underlying support for gold and silver. It has been an interesting first two weeks of the month and it is looking more and more like the second half of the month will be just as intriguing.
Perhaps the biggest takeaway from today was the fact that the Fed did little to provide insight as to when the next rate hike might be. Admittedly, the voting FOMC members may have no idea when rates will be able to be raised next, so their lack of hinting might be a direct result of that.
Wrap-Up
As we look ahead to Thursday and the rest of the week, the attention of many investors will be on the weekly jobless claims report, which is due out sometime late morning tomorrow. In addition to this, the shift of the global marketplace will be to the referendum that may result in Britain exiting the European Union. This is something that has a very big impact on the global economy, and is something that will garner a strong reaction one way or another by investors from all over the world.
For precious metals, the ball is in their court. Both gold and silver are playing host to plenty of momentum, and the way things are looking now that is not going to change anytime soon. Other pieces of US economic data are due out before the week is through, however they will need to be either shockingly poor or exceptionally upbeat to emit a large reaction from the investing public.
