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    JM Bullion Gold and Silver Market Update (6/21/16)

    Gold Spot Price Open: $1,291

    Gold Spot Price Close: $1,271

    Change in Gold Spot Price: -$20

    Silver Spot Price Open: $17.58

    Silver Spot Price Close: $17.23

    Change in Silver Spot Price: -$0.35

    Precious metals continued to back down on Tuesday thanks to a growing belief that the UK will, in fact, remain a part of the EU. When all was said and done, gold lost close to 20 dollars while silver lost more than 30 cents. Platinum and palladium finished the day mixed, but neither metal did much to revert their respective downward trends.

    Yellen Stresses Caution Regarding Rate Hikes

    Janet Yellen spoke to the US Senate Committee on Banking and in her prepared speech made it clear that caution needs to be exercised with regard to when interest rates will be raised. In her statement, she said, in part that “proceeding cautiously in raising the federal funds rate will allow us to keep the monetary support to economic growth in place while we assess whether growth is returning to a moderate pace, whether the labor market will strengthen further, and whether inflation will continue to make progress toward our 2 percent objective.”

    In this excerpt, you will see a few keywords having been used. First was the emphasis on seeing positive, sustained economic growth before interest rates are raised. Secondly, Yellen emphasized, yet again, that inflation needs to hit, or at least come close to, a certain point, In recent months, both economic growth and inflation data has been anything but upbeat, and for that reason we are seeing a Federal Reserve that has lost almost all confidence that rate hikes can be sustained in the near future.

    For gold and silver, the Fed’s clear reluctance to raise rates is a good thing, but other factors across the global marketplace are actively preventing gold and silver from continuing their trek forward. It will be interesting to see if this continues, or if the decreasing likelihood that the Fed will raise rates anytime soon will end up giving metals additional underlying support.

    Stocks Mostly Upward on BRExit Rumors

    Though we have been focusing on the potential that the United Kingdom will soon leave the European Union for the past few weeks, we have recently seen a shift in what we think the outcome of the upcoming referendum vote will be. Now, there seems to be more people who think that the UK will remain a part of the EU than there are people who believe they will leave. As a result, global stock markets have performed better these last few days than they have at any point in the past few weeks.

    As stocks try to move forward, investors the world over will be looking forward to another speech being delivered by Fed Chair Janet Yellen. This time, Yellen will be speaking in front of the House Financial Services Committee. Though I imagine she will continue to repeat the same points made in her speech today, investors and market watchers alike will pay attention regardless.

    Other than that the main focus for investors will continue to be the referendum vote in the UK, which is still expected to take place on Thursday. Though we are seeing more and more people become convinced that the UK will remain part of the EU, it seems as though opinions are more or less evenly split, which makes this referendum vote interesting to watch.

    Wrap-Up

    Gold and silver are not putting forth a very positive start to this week, but that is mostly because of what is expected to come of the referendum vote. If you look at the interest rate outlook, that is very much playing in the favor of metals. As we look ahead to the last three days of the week, there is no clearcut way to determine what direction metals will head in.

    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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