Posted on January 11, 2016
Gold Spot Price Open: $1,110
Gold Spot Price Close: $1,098
Change in Gold Spot Price: -$12
Silver Spot Price Open: $14.06
Silver Spot Price Close: $13.95
Change in Silver Spot Price: -$0.11
Gold and silver backed down to begin a new week as many of the same factors we witnessed towards the end of 2015 continue to weigh on spot values. When all was said and done, gold lost about twelve dollars while silver declined to the tune of little more than 10 cents. Platinum and palladium’s losses were a bit larger on the day, with platinum losing more than 30 dollars while palladium fell by about twenty.
As the heat surrounding last week’s slew of geopolitical happenings begins to subside, investors are now turning their attention elsewhere, and for gold and silver this is not such good news. To begin the new week, oil was once again on the decline, and this brought precious metals down straight from the offing. Oil is now trading at less than $32/barrel, which is a crucial psychological price point. Driving oil’s decline is the general mood most investors are taking towards China and the prospects for Chinese economic growth. The world’s second-largest economy continues to emit poor performance after poor performance, and that much bodes poorly for the future outlooks for the economy. So long as people are under the impression that the Chinese economy is going to continue struggling throughout the latter stages of 2016, demand for oil will also slump. You see, as one of the largest industrial players in the world, any slowdown on the part of China will almost always have a negative impact on the price of crude oil.
Today saw China’s main index fall by more than 5% after the country’s main stock index fell by 10% by the time markets closed last week. From the outside looking in, it seems as though Chinese officials have completely lost control of their nation’s economy. Barring any major changes, I expect that we will continue keeping a close eye on how China performs over the coming days and weeks as it will directly influence the direction in which precious metals head. This is especially true if we do not see an influx of geopolitical happenings like we did a week ago.
Though many retailers have not yet released their year-end numbers, it is already becoming quite evident that those numbers are not going to be overly upbeat. The reason? There are many reasons, but most experts are pointing towards the unusually warm weather most of the United States experienced during December as reason behind the expected poor sales figures.
Warmer weather did not affect all retailers’ sales, but definitely put a damper on the sales numbers of companies who sell outdoor clothing, winter sports gear, and other items that are typically only useful during the cold winter months.
Not only did warmer weather keep people outside in the sunshine, it forced retailers to offer insane deals just to get people into the door. These deals alongside the cold weather was more than likely enough to see sales figures pale in comparison to what they were expected to be. The country is still in the midst of what can best be described as an unusal pattern of weather, so it will be interesting to see what kind of impact this will continue to have on retail sales.
All things considered, Monday was more of a quiet day across the global marketplace. Though a few companies’ retail sales reports trickled in, the major players have not yet published data, but will likely do so before the end of the week. In addition to retail sales, investors will also be interested to see how the US economy finished off the year; this is especially true in the wake of Friday’s very upbeat employment report.