Gold Spot Price Open: $1,158
Gold Spot Price Close: $1,159
Change in Gold Spot Price: +$1
Silver Spot Price Open: $15.18
Silver Spot Price Close: $15.18
Change in Silver Spot Price: NO CHANGE
Gold and silver bounced back a bit on Wednesday after suffering heavy losses through the first few days of the week, but the bounce back was almost entirely done away with by day’s end. When all was said and done, gold managed to gain a single dollar while silver finished the day unchanged.
Bargain Hunting Lifts Spot Values
As expected, yesterday’s dramatic moves downward on the part of gold and silver spot values prompted some bargain-hunting buying today as spot values opened at multi-month lows. Though metals will finish the day just barely in the green, gains were marginal at best and did very little to help values recover from recent losses. In fact, most think that today’s tick upward was nothing more than a momentary move as current global economic conditions are such that sustained gains are going to be tough to come by.
With that said, however, a recent tumble on the part of Chinese stock markets has consumed the attention of the marketplace. Should stock markets in China and elsewhere continue to perform erratically, you can bet that some safe-haven, risk-aversion demand will begin to take shape. The situation involving Greece stands the chance to aid safe-haven purchases of gold and silver as well, though I am not holding my breath on that one.
Poor Performance of Chinese Stocks Threatens Global Economy
Overshadowing the Greece situation in recent days is the fact that China’s stock market has been thrust into a free fall of sorts. On Tuesday, Chinese stocks plunged and only worked to intensify a weeks-long downward move on the part of equities. On Wednesday, things did not improve at all as China’s main stock index out of Shanghai fell by more than 6%. Since the middle of June, Chinese equities have been suffering and have been on an almost steady decline. Though most Chinese stocks are still at nice levels thanks to a rally that happened earlier in the year, investors the world over are seriously beginning to wonder about the stability of the world’s second-largest economy.
Because so many economies, like those in Japan, Australia, South Korea, and the United States, have such close ties to Chinese companies, any negatives coming from China will almost always affect those economies in a similar fashion. Everything that is going on in China right now is very preliminary, but people are taking notice and investors the world over are preparing themselves for the worst. I am sure we will find out more about this situation as the week wears on, and it will be especially interesting to see if Chinese equities continue to suffer or if a corrective bounce is in store.
Wrap-Up
Looking ahead to the last two days of the week, the main focuses will remain on China and Greece. For now, Greece is the biggest concern for investors, but as China’s stock market continues to decline, that will surely begin to consume more of the market’s attention going forward. For gold and silver, it is tough to say what the next few days have in store. With all of this turmoil, I would not be surprised to see metals continue moving upward, but with how things have been going lately it is impossible to say with any certainty what the rest of the week holds.
