Gold Spot Price Open: $1,283
Gold Spot Price Close: $1,291
Change in Gold Spot Price: +$8
Silver Spot Price Open: $19.49
Silver Spot Price Close: $19.63
Change in Silver Spot Price: +$0.14
Precious metals posted some solid gains on Thursday, but they could have been larger if it weren’t for some economic data from the United States. When all was said and done, gold picked up about 8 dollars while silver was able to add roughly 14 cents. Platinum and palladium also trended upward for a majority of the day.
Stocks Decline on Risk-Off Day
US equity markets finally cooled off a bit on a day when tensions between Ukraine and Russia rose to new highs. Towards the end of the day yesterday and again this morning, Ukrainian military officials claimed that Russian troops had invaded Eastern Ukraine, seizing border towns and cities. Despite Russia’s government denying these claims, it is clear to see that the market perked up at the news of fresh tensions and possibly new violence in Eastern Europe. As a result, US equity markets sold off for a majority of the day while precious metals were able to make gains and hang on to them until the time markets in the US closed.
As you could have probably guessed, the market’s focus on geopolitical tensions and violence in Ukraine acted as a factor encouraging safe-haven demand for precious metals. Unfortunately, however, the gains made by metals during the day were more or less pared by the time markets closed due to a stronger GDP report from the United States.
GDP Report Boosts US Dollar
After the spot values of gold and silver moved forward fairly dramatically throughout the first few hours of the day, a GDP report released later in the afternoon worked to limit and revert those gains. According to the official report, the United States’ second-quarter GDP was up by more than 4% on an annualized basis. This number bested market expectations and was enough to help push the US Dollar just a little bit higher today.
In recent weeks, the quality of US economic data has been of particular importance to investors the world over as it will likely have a direct bearing on the future of monetary policy in the United States. In case you missed it, the Fed has been reiterating time and time again that it is going to take consistently improving US economic data for them to raise interest rates in the US. The last month or more has yielded a boatload of economic data, most of which has been on the upbeat side. As a result, there is a growing belief that interest rates in the US will be raised sometime early next year. With that said, however, there is no real way of knowing when the Fed will make any monetary policy changes.
Wrap-Up
As we look ahead to the final day of the week, it is clear that the attention of the marketplace will once again be fixated upon the tensions in Ukraine. As we head into a long weekend, and one that marks the unofficial end of summer, investors will be cautious about their decisions as a lot is bound to happen over the coming days. Still, I am of the belief that the crisis in Ukraine will fade from the headlines just as quickly as it entered them.
