Gold Spot Price Open: $1,319
Gold Spot Price Close: $1,312
Change in Gold Spot Price: -$7
Silver Spot Price Open: $19.10
Silver Spot Price Close: $18.76
Change in Silver Spot Price: -$0.34
Gold and silver both lost to close out what has been a less than stellar week for precious metals across the board. When all was said and done on Friday, gold lost about 7 or 8 dollars while silver trended downward by more than 30 cents. Platinum and palladium finished the day and week in opposite fashions, with platinum losing little more than 10 dollars while palladium actually managed to add about 15 by the time the day came to an end.
Inflation Data Pushes Dollar Forward
Inflation has long been well below the Fed’s target of 2%, but the end of this week brought about some upbeat data which showed that perhaps things are beginning to improve. According to the US Labor Department, the Consumer Price Index in August rose by .2. After remaining unchanged in July, this data was welcomed by the Fed hawks, or those that would like to see interest rates raised sooner rather than later; even if they aren’t raised this month.
On an annual basis, from August of 2015 to last month, the CPI rose by 1.1%, up from the .8% increase recorded on an annual basis in July. This data beat the expectations of polled experts. In turn, in just one day, the likelihood for a rate hike to be announced next week has jumped up from 12% to 15%. As you can plainly see, it is still not even close to a guarantee that rates will, in fact, be hiked come the end of next week’s meeting, but it also seems as though the hawks are gaining just a bit more traction as this week is brought to a close. As you might have guessed, all of this only serves to beat down precious metals.
Further pressuring metals was the greenback’s resurgence in the wake of the CPI data. Naturally, a Dollar that is performing better against its rivals is almost always going to put at least some pressure on the precious metals market.
Stocks End Lower, On Verge of Falling Further
Of the 3 major US stock indexes, 2 are going to be finishing Friday below their weekly moving averages. This is a bad sign and shows that perhaps equities are not finished descending. Both the Dow Jones Industrial and S&P 500 are ending the week in poor fashion and market experts and traders have the feeling that perhaps this decline is not quite finished.
For precious metals, this is not such bad news, but with the monetary policy hawks working in conjunction with a stronger Dollar, poor performances on the part of equities will only do more to limit losses rather than contribute to any gains.
On top of all of this, crude oil finished the day and week trending downward thanks to a few different factors. Not only are crude stockpiles in the US as plentiful as ever, people are slowly but surely giving up hope that OPEC will do anything productive in limiting the daily output of oil. It is interesting that hope for a production freeze is fading considering the meeting where this topic is supposed to be discussed has not even taken place yet.
Wrap-Up
Once again, we are reflecting upon a week that most precious metals investors would like to quickly forget. Though some decent gains were made during the early part of the week thanks to a stock market sell-off, those gains have all but been erased as we head into the weekend. Next week is going to feature both the BoJ and FOMC policy meetings, and even though it is unclear what will come as a result of those two events, it gives us something to look forward to, and investors something to continue speculating about.
