Gold Spot Price Open: $1,109
Gold Spot Price Close: $1,111
Change in Gold Spot Price: +$2
Silver Spot Price Open: $15.39
Silver Spot Price Close: $15.38
Change in Silver Spot Price: -$0.01
After hitting a 3-week high on Monday, precious metals were forced back down to earth on Tuesday thanks to a surprise move by China. When all was said and done, gold hovered around where it opened while silver added a few pennies. Platinum and palladium, like gold, also both stayed quite close to where they began their respective days.
Surprise Move by China’s Central Bank
Gold and silver suffered a bit of a setback after a few consecutive days’ worth of gains thanks to a surprise move made by the Central Bank of China. Before US markets opened today, we received word of China’s intent to devalue its currency, thus making the country’s exports more attractive to foreign buyers. Officially, the Central Bank of China devalued the Yuan by nearly 2% to bring it the currency to its lowest level in more than 3 years.
Thanks to the devaluation of the Yuan, the US Dollar was able to bounce back after a few disappointing sessions. The Dollar suffered, in part, due to comments made by Federal Reserve vice chairman Stanley Fischer regarding interest rate hikes. In his prepared speech, Fischer made it clear that presently low inflation worries him and that rate hikes may have to wait until inflation levels normalize a bit more. With that said, the market is still convinced that interest rates are going to be risen come this September, so until we hear more commentary like that which we heard from Fischer on Monday, the belief is that rate hikes are coming, and coming soon.
Stocks Drop On China Currency Move
Stocks in the US suffered setbacks on Tuesday thanks to China’s move to devalue the Yuan. Being that China is so closely tied with the US, any downward movement on the part of China’s economy almost always is reflected by the US economy.
In other news, Greece is reportedly closing in on a deal with international lenders that will see close to 100 billion euros given to the suffering European economy. Greece’s finance minister announced that his negotiating team and international lenders are nearing a conclusion. Only a few issues remain and the deal is expected to be hammered out by the end of the week. The money that is expected to be given to Greece will go directly towards an August 20th debt payment. Greece has been out of the news for the last few weeks, and many are hoping that that will remain the case as the year moves forward.
Wrap-Up
As is plain to see, today did not offer up much in the way of fresh news stories. In fact, apart from China’s devaluing of the Yuan, there wasn’t all that much for investors to talk about at all. Looking ahead, the focus of investors both in the US and abroad will remain on any and all economic talking points relating to the US. We will see continued attention paid to the progress (or lack thereof) of the US Dollar as the greenback’s movements are now being seen as a direct way to gauge how the market is feeling about the timing of interest rate hikes. For gold and silver, despite recent gains, I would not be at all surprised to see spot values tick back down should the Dollar remain strong.
