Gold Spot Price Open: $1,330
Gold Spot Price Close: $1,329
Change in Gold Spot Price: -$1
Silver Spot Price Open: $19.13
Silver Spot Price Close: $19.08
Change in Silver Spot Price: -$0.05
Precious metals did little moving on Monday, but the movement that was recorded was mostly downward in direction. When all was said and done, gold lost only a dollar or two while silver ended up losing about 5 cents. Platinum and palladium lost on the day as well, with both metals losing right around ten dollars.
Another Day of Rate Hike Confusion
If you have been following the interest rate discussion in the United States for any amount of time, few people would be surprised if you went to see a doctor about having whiplash. It seems as though that, as each day passes, the remarks we hear from members of the Federal Reserve changes from what we had heard the day before. Today brought with it a continuation of that trend as the presidents of the Atlanta and Minneapolis Federal Reserve banks made remarks that, in many ways, contradict one another.
First was Dennis Lockhart from Atlanta. Though he is not a voting member of the Federal Open Market Committee, he remark that he would encourage voting members—and the whole of the Fed—to seriously consider figuring out when changes to monetary policy might be enacted. Beyond that, he refused to comment on what he thought might come as a result of the next few FOMC meetings. In all, these remarks were viewed as Hawkish as most investors see Lockhart as someone who wants to see rates hiked sooner rather than later.
President of the Minneapolis Federal Reserve, Neel Kashkari, was more dovish in his remarks, however. When he was speaking with CNBC earlier today, Kashkari made it clear that he does not want the FOMC to make any rushed decisions with regard to monetary policy in general and interest rates specifically. Like Lockhart, Kashkari is not a voting member of the Fed.
Perhaps the most interesting happening of all of this was when Lockhart refused to go into further detail as to his specific hopes for interest rate hikes. He understands that his and other Fed members’ remarks have been influencing the direction of markets, and wanted to shy away from his words doing that today. While it does not look like he succeeded, it was an interesting thing for investors to hear.
Metals Surprisingly Resilient
Even though the remarks were contradictory, it was interesting to see precious metals hold their ground on a day when hawkish comments were made with regard to interest rate hikes. In recent history, metals have suffered almost every time a voting or non-voting member of the Federal Reserve has alluded that they would like to see interest rates risen sooner rather than later. For whatever reason, today did not see metals suffer.
Perhaps it is due to the fact that investors are simply not convinced that economic conditions permit a hiking of interest rates. Whatever the reason, metals seem to have survived what could have ended up being a rough start to the week.
Wrap-Up
In the lead-up to the FOMC meeting, you can bet that other voting and non-voting members will make comments about whether they want to see rates kept at current levels or risen, and why that is so. There isn’t a wealth of economic data on deck for this week, but you can bet that even the smallest reports will have the potential to shake up the marketplace. As for what the next four days have in store for precious metals, that much is tough to say. We will simply have to sit back, take in the interest rate talk, and see what happens. At this point in time, the nearly undivided attention of the market is on what the future holds for policy in the US and other major economies around the world.
