Gold Spot Price Open: $1,312
Gold Spot Price Close: $1,310.84
Change in Gold Spot Price: -$1.16
Silver Spot Price Open: $20.02
Silver Spot Price Close: $20.01
Change in Silver Spot Price: -$0.01
Precious metals were feeling pressure on Friday and ended the week trending ever so slightly downward. When all was said and done, gold lost about 1 dollar while silver lost roughly a penny. Palladium was able to add a little bit of value to round out the week, but platinum, like gold and silver, traded downwards for a majority of the day.
Iraqi Airstrikes Give Metals a Boost
A primary focus for investors this week was and continues to be the wide array of geopolitical happenings unfolding around the world. While the crisis in Ukraine has caught the attention of investors for a majority of the week, it was violence in Iraq that caught the market’s attention today. Shortly after markets opened, President Barack Obama was seen announcing that he had sanctioned airstrikes against Islamic militants in Iraq.
As the Islamic State continues to wreak havoc across much of Northern Iraq, the Iraqi military is being continuously worn thin. As such, the government of Iraq has called upon the United States for help fighting off the rebels. Obama says that these airstrikes are meant to help the Yazidi minority as well as US military personnel who were recently sent to the country. As is the case most times violence, or the threat of violence dominates the headlines, precious metals were given a bit of a boost during the early morning hours of Friday. By the time the day came to an end, however, most of the gains made earlier in the day were reverted as investor risk-appetite once again picked up upon hearing news that Russia may actually be attempting to restore peace to Ukraine. Still, gold finished this 5-day trading session having posted its largest weekly gain in nearly 2 months.
Stocks Move Higher On News of Russia’s Mediating Role
For a large part of this week, US equities were feeling a lot of pressure thanks to rising tensions in and around Ukraine. On Monday, it was reported that more than 20,000 Russia troops were massing along the country’s Western border with Ukraine. Today, however, it was announced that Russia had offered to mediate peace talks between the Ukrainian government and the pro-Russian rebels. This news came as a huge surprise to a market that was, earlier in the week, expecting Russian troops to cross the border into Ukraine.
In response to this most recent news regarding the Kremlin, investors began exhibiting more of a risk-on attitude. Despite equity markets having already made up for losses incurred earlier in
the week, most investors and market analysts are convinced that the month of August will not be too favorable for precious metals. Terry Sandven of US Bank Wealth Management isn’t expecting much from stocks this month and feels as though “equities are likely to trade sideways throughout August and be driven by geopolitical headline news. From a technical standpoint, it is a good time to add to positions as we do not expect a 10% correction at this point.” With violence in Iraq on the rise and things as uncertain as ever in Ukraine, its already looking like equity markets will be fighting off pressure for at least the duration of this month.
Wrap-Up
Looking ahead to next week, it is likely that investors will remain focused on the number of geopolitical situations developing across the globe. With fresh US airstrikes in Iraq, tensions and violence in Ukraine, and Israel’s continued offensive on the Gaza Strip, there will be a lot for investors to pay attention to and discuss.
