Gold Spot Price Open: $1,340
Gold Spot Price Close: $1,341
Change in Gold Spot Price: +$1
Silver Spot Price Open: $19.78
Silver Spot Price Close: $19.40
Change in Silver Spot Price: -$0.38
Gold began the week moving slightly higher while silver began the 5-day trading session by moving sharply lower. When all was said and done, gold ended up gaining about 1 dollar while silver actually ended up losing more than 35 cents. Platinum and palladium finished down on the day as well, with platinum conceding more than 15 dollars while palladium lost close to 10.
Slow Physical Demand Keeps Metals Subdued
Even though the US Dollar Index is trending downward to begin the week, metals are not exactly reacting as you might expect them to. Despite gold’s somewhat positive performance, other metals lagged behind mostly due to a lack of strong physical demand. Even though US interest rates were left unchanged at the conclusion of last week’s FOMC meeting, the fact that rates will, at some point, be raised is really keeping precious metals subdued. Whether rate hikes come next month or in December it doesn’t really matter, because the FOMC has said time and time again that rates will be raised when the timing is right.
A lack of other fundamentally bullish news is, in a sense, ensuring that metals stay within their well-defined ranges. Being that we are approaching both the end of the month and quarter, the economic data stream will pick up the pace a bit, so the lull in action is, in all likelihood, only going to be temporary.
Stocks Fall Ahead of US Presidential Debate
In addition to the USD falling to start the week, stocks also began the trading session by moving solidly lower. The big news of the day is the first of three scheduled presidential debates between Hillary Clinton and Donald Trump. Normally, a presidential debate would not have an overly large impact on the stock market, but being as these two candidates are some of the most polarizing this country has ever seen, this time is a bit different than most.
Clinton and Trump are reported as being the least-liked candidates in election history, so the debates are going to be highly anticipated, widely viewed, and generally more important than they have been in the past. With about half of the United States’ eligible voting population saying that the debates will heavily influence who they decide to vote on, I am sure this is not the last we will hear of Trump/Clinton debates and their impact on US and global markets.
Important Economic Data Points Looming
As was mentioned above, the end of the 3rd quarter of 2016 will coincide with the conclusion of this trading week. As such, there are plenty of economic reports for investors to look forward to. From today through Friday, some of the noteworthy reports due for release include new home sales, consumer confidence, durable goods orders, and GDP. At this point it is tough to say what the overall expectations are, but to put it simply most people anticipate that the data will be more positive than anything else.
As it has been for months now, if the data comes back majorly positive, gold and silver prices are likely to suffer as a result. If the data, on the other hand, misses the mark, gold and silver may stand to benefit. As you could have probably guessed, this has everything to do with interest rates. In the eyes of the market, upbeat data suggests that rates will be raised sooner than later while downbeat data suggests that the FOMC will hold off on making any policy changes. Though, in reality, the Fed can make any moves that it wants at any time it chooses, this is how the marketplace generally feels and reacts.
Wrap-Up
Monday got this week off to a slow start, but with the sheer quantity of economic data expected to be publicized over the next 4 days I am sure the activity levels will increase. Whether this is good or bad news for precious metals remains to be seen. Fortunately, both gold and silver did not start the week off too poorly.
