Gold Spot Price Open: $1,189
Gold Spot Price Close: $1,183
Change in Gold Spot Price: -$6
Silver Spot Price Open: $16.22
Silver Spot Price Close: $16.07
Change in Silver Spot Price: -$0.15
A one-two punch of stronger US stocks and a stronger US Dollar pushed spot values downward today. When all was said and done, gold lost about 6 dollars while silver finished downward by about 15 cents. Platinum moved upward today, but only barely. Palladium on the other hand, finished down by about 7 dollars.
FOMC Meeting In Focus, Stocks Move Higher
Today kicks off the biggest event of the trading week, and that is, without a doubt, the FOMC meeting for the month of June. With interest rate hikes still a looming possibility this summer, investors are looking for any clues at all with regard to when and by how much rates might be raised by. With recent economic data being as upbeat as it has been, there is a growing contingent that believes interest rates will be raised as early as this week. I do not think that this will be the case, but it will be interesting to see what Janet Yellen has to say about rate hikes.
At present, most economists expect that interest rates will not be raised until September, at the earliest. In the words of SG Global’s Michala Marcussen, “Activity is not yet strong enough to give the Fed ‘reasonable confidence’ that progress in the labor market will continue. Therefore, we do not expect any signals regarding the timing of the lift-off in rates.” Going forward, the big economic data focus will be on the housing data stemming from the United States. The housing market is most heavily affected by rate hikes, so it is only right that this sector of the economy is the one being most closely monitored.
Clock is Ticking Away on Greece
Though there haven’t been many new developments over the last few days, the marketplace is slowly but surely coming to terms with the fact that Greece may no longer be a member of the European Union. With a bundled payment to creditors scheduled to happen on the 21st of June, the main concern is whether Greece has the money to make the payment. As of now, there is almost no one who believes Greece has the extra money on hand to pay back the IMF and other creditors.
Though people like German chancellor Angela Merkel and other high-ranking officials have maintained that they would like to retain the structural integrity of the EU, that much seems like an impossibility at this point in time. European stocks have been struggling as a result of the worries relating to a Greece-less EU, and I expect that this much will continue.
For gold and silver, the worries being created by Greece’s inability to pay back creditors are helping urge safe-haven demand. For this reason, spot values are gaining some base support preventing them from falling too much further than they have over the past few weeks. Gold has maintained a spot value around $1,200/ounce while silver seems to be just barely clinging on to a position above $16/ounce. Once this situation involving Greece is finished, however, I am not so sure how strong support for metals will be.
Wrap-Up
All things considered, Tuesday has not proven to be all that action-packed. Investors are now more or less awaiting the conclusion of this week’s FOMC meeting and accompanying post-meeting statement. I anticipate that tomorrow will be the most important day of the week, but what this means for gold and silver is tough to say.
