Gold Spot Price Open: $1,316
Gold Spot Price Close: $1,317
Change in Gold Spot Price: +$1
Silver Spot Price Open: $19.25
Silver Spot Price Close: $19.22
Change in Silver Spot Price: -$0.03
Precious metals did not do much moving thanks to most investors holding their positions as two very important central bank meetings kicked off on Tuesday. When all was said and done, gold moved upward and gained about a dollar while silver lost roughly 3 cents on the day. Platinum and palladium finished the day mixed, but neither metal finished too far from where it began.
FOMC, BoJ Meetings Kick Off
It seems as though central bank meetings have been the talk of the global marketplace for a few weeks now, but today is when they finally got underway. Both the Bank of Japan and the Federal Open Market Committee of the United States began meetings which very well might prove to be pivotal to the formation of the respective nations’ monetary policies going forward. While Japan is pondering the expansion or, if nothing else, the continuation of easy money policies, the United States is very much considering tightening policy by raising interest rates. With that much being said, there are still plenty of doubts surrounding whether either one of the two aforementioned entities will do anything to change policy at all.
By markets’ open tomorrow, we will receive the final word from the BoJ meeting, but we will have to wait until the afternoon to hear the fate of US monetary policy. From sources close to the Federal Reserve, it is unlikely that we will hear of a shift in monetary policy come tomorrow afternoon. If nothing else, investors are hoping to hear clues with regard to what direction the Fed is going to head in going forward. Still, even the release of concrete clues seems like a longshot as the Fed seems to be divided and uncertain of what exact course they would like to see monetary policy take as we head closer to year’s end.
Weaker Than Expected Housing Data Mostly Ignored
Perhaps a testament to how much weigh investors are placing on the ongoing central bank meetings is the fact that precious metals prices have not really moved in the wake of August housing construction data which, in truth, really missed the mark. According to the Department of Housing and Urban Development, the number of construction starts for new houses fell by nearly 6% in the month of August alone. While most experts were anticipating that housing starts would fall in August, these expectations were for a slight fall, not anything as large as 5.8%.
With that being said, it is important to note that, on an annualized basis, we are seeing .9% more housing starts right now than were recorded at this point a year ago. To make a long story short, what this data really does is show that even though the housing market eased up in August, it is still in a decent position overall.
For gold and silver, August’s poor data might have, on most other days, been the source of some safe-haven support, but due to the attention of investors being placed elsewhere, this data was mostly ignored. What this might do, however, is give investors less reason to believe that tomorrow will bring about a rate hike announcement. At this point, there is only a very slim chance that we will hear of a rate hike.
Wrap-Up
As you could have probably gathered by now, tomorrow is arguably the most important day of the week. With both the BoJ and FOMC meetings coming to a conclusion, investors will have their full attention focused on statements made in the wake of these meetings. Even if no changes are made to monetary policy, there will still be plenty for investors to focus in on. For gold and silver, what is or isn’t divulged tomorrow will more than likely have a direct and immediate impact on spot values. What type of impact the news, or lack thereof, will have, however, remains to be seen.
