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    JM Bullion Gold and Silver Market Update (8/4/14)

    Gold Spot Price Open: $1,294

    Gold Spot Price Close: $1,289

    Change in Gold Spot Price: -$5

    Silver Spot Price Open: $20.35

    Silver Spot Price Close: $20.20

    Change in Silver Spot Price: -$0.15

    Precious metals had a tough Monday as US equity markets were able to regain their footing after Friday’s slide. When all was said and done, gold lost about 5 dollars while silver’s losses tallied in at 15 cents. Platinum traded sideways for a majority of the day while palladium’s spot value declined by more than ten dollars.

    Equities Regain Footing After Tough End of the Week

    As unlikely as it may have seemed only a day ago, US stock markets began the day making gains and continued adding value straight through to the time markets closed. The reason for this is due to the fact that, over the weekend, reports began flying around claiming that Portuguese bank Banco Espirito Santo was on the verge of collapse. Luckily, however, Portugal’s national bank, the Bank of Portugal, unveiled its plan to save Espirito Santo today. Normally, a European bank on the verge of collapse would be enough to send the market into a state of panic, but this time around, the fact that a definitive course of action was unveiled by Portugal’s national bank provided investors with some confidence.

    Describing the situation perfectly was Phil Flynn, senior market analyst for Price Futures Group, when he said that the market’s gaining confidence from the Bank of Portugal’s bailout plan for Espirito Santo reassures investors that “there is some kind of structure in place in Europe — something they didn’t have before the last crisis — for these kinds of situations. So it seems to be giving the (stock) market an uneasy calm.” Essentially, the fact that Portugal was prepared to handle this crisis of sorts bodes well for the overall confidence of the investing world.

    Metals Experience Pullback After Recent Knee-Jerk Gains

    Precious metals fared rather poorly today, but their price action should not come as much of a surprise to anyone. After metals made gains in the wake of a poor US employment report last Friday, there were many people thinking that spot values were bound to continue moving upwards. The reality, however, is that Friday’s gains were more of an isolated incident and were always going to be reverted the second investor confidence was given a boost. That boost came this morning in the form of news regarding Portugal’s banking system, and metals were once again being pressured.

    So long as equity markets and the US Dollar continue to trend upward, it is going to take a lot for precious metals to do anything other than edge downward. The simple fact of the matter is that investor risk-appetite is strong right now, and that is something that will almost always work against the safe-haven qualities exhibited by gold and silver. The wide array of geopolitical scenarios unfolding around the world may be helping precious metals slightly, but they are doing more in the way of limiting selling pressure than contributing to any gains being made.

    As we move forward into the week, the general lack of any noteworthy pieces of economic data will force investors to continue analyzing the strength and direction of US equity markets. Phil Flynn also described this perfectly when he was quoted as saying, “For this week, for the gold market and silver, a lot is going to depend on what the stocks do. If we get a sense that stocks are going to sell off, I think you are going to see gold become more attractive. If the stocks rebound, then I think gold is going to be less attractive.”

    Wrap-Up

    Looking ahead to the last four days of the week, it is clear to see that there isn’t much going on. While there are plenty of geopolitical scenarios developing in Europe and the Middle East, most of them have stagnated to some degree and are not as much of a concern for investors as they were a week or two ago.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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