Gold Spot Price Open: $1,329
Gold Spot Price Close: $1,321
Change in Gold Spot Price: -$8
Silver Spot Price Open: $19.10
Silver Spot Price Close: $18.85
Change in Silver Spot Price: -$0.25
Gold and silver fell on Tuesday, but the feeling is that things could have been a lot worse were it not for under-performing equities. When all was said and done, gold lost about 8 dollars while silver fell by more than 20 cents. Platinum and palladium both fell on the day, with platinum losing about 20 while palladium was down by 10.
Metals Being Pulled in Different Directions
Right now, gold and silver are being pulled in different directions by equities as well as the interest rate outlook. Today, equities in the US and other parts of the world were mostly down. In addition, investors are becoming increasingly preoccupied with the upcoming FOMC meeting, which is set to take place next week. Only a week ago there was essentially no one who thought that rate hikes would happen this month, but now we are seeing a change of pace, so to speak.
Sean Lusk, of Welsh Trading, commented on what is going on across the global marketplace by saying, in part, “The market is completely wild and unpredictable right now because of next week’s Federal Reserve decision. On a day when the Dow is down 200 plus points you would expect to see gold higher but it’s not.”
With so much volatility across the global marketplace, it is and has been tough for many to imagine that the Fed will feel comfortable enough to raise interest rates. Members of the FOMC have made it clear for quite some time that a consistent stream of upbeat economic data is needed before they will even think about raising interest rates. What’s more, with the UK having left the EU not too long ago, amongst other happenings, global market conditions are far from stable as well. If the Fed sticks to what it has been saying all along, it doesn’t seem like interest rates are going anywhere. With that said, the FOMC can do whatever it wants and that much is always difficult to gauge.
Right now, it really does seem, from looking at the trajectory of spot values, that an increasing number of people are under the impression that the Fed will make some sort of policy shift next week. Were it not for this belief, one would think that suffering equities would provide metals with a safe-haven boost of sorts.
Lockhart to Step Down in February
Today we received some interesting news when Atlanta Federal Reserve president Dennis Lockhart announced that he will step down at the end of February, 2017. For people who keep up with Federal Reserve rules and regulations, Lockhart is not choosing to step down, but is rather being forced down due to this being the completion of his tenth year of service.
There hasn’t been much of a reaction from the market, but there may be some sort of reaction once candidates to fill his shoes begin making their way into the headlines.
Wrap-Up
All in all, Tuesday saw some action, but that action did not end up moving spot values too far in any one direction. In fact, if we are looking at today as a match of safe-haven demand spurred by falling equities versus the belief that interest rates will be risen come next week, it’d have to be said that the latter won out. Though losses were not very significant, it might have just set the tone for how the rest of the week is going to go. With Fed commentary expected to continue streaming in, there is no doubt we will see metals react to this further.
