Gold Spot Price Open: $1,343
Gold Spot Price Close: $1,330
Change in Gold Spot Price: -$13
Silver Spot Price Open: $19.58
Silver Spot Price Close: $19.12
Change in Silver Spot Price: -$0.46
Precious metals struggled quite a bit in the wake of some US economic data on Tuesday, and losses quickly began to pile up. When all was said and done, gold lost a little more than 10 dollars while silver got hit hard and ended up losing more than 45 cents. Platinum ended the day having lost more than 15 dollars, but palladium actually finished the day having added about 7 or 8.
Strong Consumer Confidence Data Sinks Metals
As was mentioned yesterday, this week is set to bring about a long list of economic data points both from this month and from this quarter, which is coming to a conclusion at week’s end. Today’s big headline-maker was consumer confidence data from the US which beat expectations fairly handily. According to the US Conference Board, September’s consumer confidence index reading of just over 104 was much higher than expected and, perhaps more importantly, about 3 points better than what was reported last month. Further adding to the strength of the report was the fact that this is the best such piece of consumer confidence data in more than 9 years. You would have to go back to August of 2007 for a reading that was as good as what we were dealt today.
Lynn Franco, who works for the US Conference Board, chimed in by saying that “consumers’ assessment of present-day conditions improved, primarily the result of a more positive view of the labor market. Looking ahead, consumers are more upbeat about the short-term employment outlook, but somewhat neutral about business conditions and income prospects.” As you could have probably guessed, US stocks as well as the USD Index were all noticeably higher in the wake of this report. In turn, this doomed precious metals to a poor day; one that saw silver come within pennies of moving below the $19/ounce threshold. Silver has been a big mover in recent weeks and is bouncing around quite a bit. Just last week the metal climbed over $20/ounce, and now we are seeing it edge in on an even $19 and perhaps even less.
Clinton Debate “Victory” Bad News for Gold, Silver
Last night was one of the most highly-viewed nights not only of the year, but in the history of presidential debates. Hillary Clinton and Donald Trump, the two US presidential front-runners, squared off on just about every major cable TV channel in a debate that was as long as it was confusing. By the time the dust had settled no one was entirely sure what just took place, but the headlines and polls were quick to award Hillary Clinton a much disputed victory.
While it may seem unusual for a debate to have this kind of impact on the precious metals market, that is exactly what happened. Safe-haven purchases of gold and silver fell off because a Clinton presidency is one that will see the status quo retained and one that allows most investors to think that her taking over Obama’s office will see very little change on Capitol Hill. A Trump victory, on the other hand, is one that is thought to come loaded with volatility and unpredictability, and this is something that breeds safe-haven demand. With no one quite sure the direction of Trump’s policies, it is believed that precious metals will be flocked to in order to avoid whatever dire consequences may come from his policy decisions and other decisions made from the Commander in Chief’s chair. So, for the day, a Clinton victory helped take away safe-haven demand. Going forward, it is highly likely that upcoming presidential debates will influence the precious metals market further, though it is far too early to say exactly how.
Wrap-Up
As we head into the middle day of the week, investors are going to gear up for even more economic data to be released. These pieces of data are taking up a majority of the market’s collective attention, and I imagine this will continue to be the case through to the end of the week and likely into next week as well. So far this has been bad news for precious metals, but that does not mean things cannot change in the blink of an eye.
