Gold Spot Price Open: $1,272
Gold Spot Price Close: $1,269
Change in Gold Spot Price: -$3
Silver Spot Price Open: $17.37
Silver Spot Price Close: $17.22
Change in Silver Spot Price: -$0.15
Gold and silver continued to fall on Wednesday as a new batch of upbeat economic data from the United States worked against metals. When all was said and done, gold lost about 3 dollars while silver moved downward by roughly 15 cents. Platinum and palladium added some value on the day, but their gains were more marginal than anything else.
Upbeat Existing Home Sales Pressures Metals
As if the beginning of this week did not prove to be detrimental enough for gold and silver, Wednesday brought about more losses. This time, the culprit was a better than expected piece of housing data from the month of May. On Wednesday it was reported that existing home sales in May moved upward by more than expected and for the 3rd straight month.
The National Association of Realtors said on Monday that existing home sales in May rose by 1.8% on an annualized basis, bringing the seasonally-adjusted total number of existing home sales to 5.53 million units. When you compare this to April’s reading of 5.45 million units, it is easy to see why investors reacted the way they did on Wednesday. This data was more or less in line with projections, but is being touted as a positive report simply because of the negative tone of recent economic data in the US.
This is but one more thorn in the side of precious metals, which have had a tough go of things through the first three days of this week. Lawrence Yun, chief economist for the NAR, said the reason for the upbeat data was due to “this spring’s sustained period of ultra-low mortgage rates.”
He went on to say that the currently low mortgage rates have “certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize.”
IMF Downgrades US Economic Outlook
It seems as though we cannot go a single week without hearing of some organization downgrading their expectations for growth on the part of the US economy. This time it was the International Monetary Fund who was downgrading their expectations for US economic growth. On Wednesday, the IMF announced that they expect the US economy to grow by just 2.2% by year’s end. This is 2 tenths of a percentage less than the 2.4% growth that was predicted roughly a year ago.
Despite this downgrade, the IMF did still comment that the US economy is in decent shape and comparatively better than most other major economies. They even touched on the strong labor market here, though that has recently been called into question over the course of the past few weeks.
To compare, the IMF is expecting the Eurozone to collectively grow by 1.5% by the end of this year, while Japan is not even expected to eclipse 1% growth by year’s end. So while the picture may be bleak at present, it is important to remember that things could be far worse.
Still, while the IMF projects decent growth this year, it was quick to point out problems that may linger heading into the future. Items like an aging workforce and increasing income disparities are two factors that can possibly derail long-term growth prospects.
Wrap-Up
Looking ahead to Thursday, it is already clear that the number one focus for the global marketplace will be the UK referendum. The weekly jobless claims report will also be called into focus, but few things matter more at the present moment than whether the UK will remain a part of the EU or not. Should the vote show that a majority of people want the UK to venture forward independently, gold and silver very well might receive a nice week-ending boost.
