Gold Spot Price Open: $1,135
Gold Spot Price Close: $1,101
Change in Gold Spot Price: -$34
Silver Spot Price Open: $14.93
Silver Spot Price Close: $14.75
Change in Silver Spot Price: -$0.18
Precious metals continued their slide on Monday, and with gold having lost more than 4% on the day, metals are now sitting at multi-month and multi-year lows. When all was said and done, gold lost about 34 dollars while silver was down by little more than 15 cents. Platinum and palladium both lost on the day as well, but neither metal moved downward by less than five dollars.
Chinese Sell-Off Drives Gold Downward
A big news story of the week came this morning when it was being reported that Chinese citizens are offloading a lot of gold. Current economic conditions and other economic and geopolitical events have caused investors to have less and less of a reason to hang on to safe-haven metals. With the Dollar strengthening and US interest rate hikes looming this Fall, the level of risk-appetite across the global marketplace is on the rise and likely to continue rising. Commenting on the situation was Georgette Boele, an analyst at ABN Amro, when she said, “Last week was an important week: you got Yellen, a three-month high in the dollar and good US economic data … there is a chance that we see more downside in coming days.”
Gold is now sitting near a 4-year low and is not looking like it is going to tick upward anytime soon. As was stated last week, Janet Yellen has made it clear that interest rate hikes will take place in the US this year so long as the economy continues to expand at the anticipated rate. Now, the real question will be whether gold can maintain a spot value above $1,100/ounce, or if another move downward will be seen over the next four days.
Stocks Doing Well, Pressuring Metals Further
As if this were big news, stocks in the US and around the world are continuing to do well, which only adds more pressure to precious metals. With events like the Iran nuclear deal and Greek debt crisis now behind us, investors are much less skittish and thus more likely to be actively trading stocks. Gina Martins Adams, from Wells Fargo, echoed these sentiments by saying, “Now that international pressures appear to have abated, investors can get back to the business of tracking earnings and economic data. Earnings season reporting begins to ramp up in earnest this week with 124 S&P 500 companies expected to report results.”
The rest of this week is going to bring about many earnings reports, and these could potentially come to the aid of precious metals. In the same breath, overly upbeat earnings reports will more than likely put additional pressure on gold and silver spot values.
Wrap-Up
Another big story that missed the headlines today was the fact that Greece was able to make a repayment of about 6.25 billion euros to a host of creditors. This wasn’t the biggest of deals, but definitely worked to maintain a higher level of calm across the global marketplace. Greek banks have also reopened after being closed for more than two weeks. With a lot of earnings reports expected to trickle in over the course of the next four days, I am sure this will be an interesting 5-day trading session. For gold and silver, however, the story has not changed much at all. Most fundamental news that is streaming in is adversarial to spot values, so unless that changes I would not be at all surprised to see spot values continue to suffer. Now sitting well-below key price thresholds, the wind is effectively out of gold and silver’s sails.
