Gold Spot Price Open: $1,135
Gold Spot Price Close: $1,127
Change in Gold Spot Price: -$8
Silver Spot Price Open: $15.30
Silver Spot Price Close: $14.87
Change in Silver Spot Price: -$0.43
Precious metals declined for a second consecutive day on renewed speculation regarding what will happen to interest rates before the end of the year. When all was said and done, gold lost about 8 dollars while silver lost more than 40 cents and fell back beneath the $15/ounce threshold. Platinum and palladium both fell on the day, with platinum losing more than 30 dollars while palladium lost less than 10.
Rate Hikes Set to Happen in December
According to economic experts polled by Reuters, interest rate hikes are expected to take place at the Fed’s final meeting of the year. Reuter’s poll assigned a 60% probability of rate hikes happening in December. For months now, investors the world over have been speculating about the prospect of raised interest rates and when they will be raised. Ellen Zentner, chief economist at Morgan Stanley, said in a statement today that, “The window for a rate hike this year has narrowed. While December remains in play, a rate hike this year is not a foregone conclusion.”
While the fact that polled economists are saying that December is when interest rate hikes will happen in December, these same economists were polled in the Spring and were just as confident that rates would be risen in June. So while today’s development is worth talking about, it is important that investors do not buy wholly into what this Reuter’s poll said.
US Dollar Extends Monday Gains
Despite today being aptly described as a risk-off day, gold and silver are making absolutely no gains. In the same breath, the US Dollar Index is extending Monday gains mostly thanks to the renewed outlook regarding interest rate hikes.
Gold and silver suffered today thanks to crude oil prices that are continuing to edge downward. This time, fears regarding Chinese consumption of crude oil were what drove prices downward. You see, at present there is a supply glut across the global crude oil supply, and with China, one of the world’s largest purchasers of the commodity on an annual basis, suffering an economic slowdown, it seems as though even less oil will be bought than originally anticipated. Furthermore, China’s economy is on pace to grow by less than 7% this year. The Asia Development Bank today revised previous expectations for annual growth of 7.2% down to 6.8%. Seeing that the Chinese government set a goal of at least 7% growth for this year, the Chinese economy is set to disappoint on multiple levels.
All of this talk of an economic slowdown in China is doing gold and silver 0 favors seeing as China is also one of the world’s biggest consumers of precious metals each and every year. The Chinese government is saying that they are planning on taking more action to combat the slowdown of economic growth, but so far their attempts to breathe life into the Chinese economy have been for naught.
Wrap-Up
All in all, Tuesday was a fairly slow day across the global marketplace as most investors were content to continue speculating with regard to when interest rates might take place. As the week moves forward, we will continue to analyze the movement of the US Dollar and precious metals spot values. It will also be interesting to see what kind of commentary comes from China, as their government continues to try and figure out how to combat continuously slowing economic growth.
