Gold Spot Price Open: $1,088
Gold Spot Price Close: $1,096
Change in Gold Spot Price: +$8
Silver Spot Price Open: $13.87
Silver Spot Price Close: $14.22
Change in Silver Spot Price: +$0.35
Precious metals rebounded on Wednesday after opening up the week in unimpressive fashion. When all was said and done, gold managed to gain about five dollars while silver accumulated gains of more than 30 cents. Platinum and palladium also performed well today, with both metals picking up somewhere in the range of 15 dollars.
Bargain Hunting Driving Purchases
Gold and silver saw a bit of bargain hunting after Monday and Tuesday’s losses. This was enough to push spot values upward today, but does not allow us to overlook the hard truth that market conditions do not favor metals in the slightest.
Also coming to the aid of precious metals on Wednesday was a USD Index that backed off a bit and crude oil prices that halted their decline. Perhaps driving gold and silver’s positive day was the first bit of upbeat economic data we have been given by China for quite some time now. According to official figures, China’s December exports improved by about 2.3%, which is far better than what was expected. To put this in perspective, November’s exports figures declined by nearly 4%. In addition, Chinese stocks, as well as most Asian stocks, were on the up and up Wednesday.
As we have been saying for quite some time, the performance of gold and silver is going to rely heavily on the performance of the Chinese economy. After all, a chain reaction is set off by China’s poor performance, and one of the chain links is precious metals. You see, thanks to China growing at an extremely slow rate, that is causing demand for oil to slump. If oil is slumping, and in recent days it has slumped considerably, that almost always bodes poorly for gold and silver, and that is exactly what we are seeing at the present moment in time. Though it may not be so cut and dry, it seems as though we need to see a marked, consistent improvement on the part of China for gold and silver to recover lost value and sustain that recovery.
Crude Oil Firms, Still Hovering Near $30
The price of a barrel of crude oil this week reached lows that we have not seen in well over a decade. Falling below $32/barrel to begin the week marked a 12-year low for the commodity, and it seems as though oil is only going to continue falling.
For a brief while on Tuesday, crude oil was seen trading below $30/barrel, which makes that one of the worst figures we have seen in the past 15 years. Though the spot value of the commodity improved as the day wore on, it is still in a pretty downbeat position.
Craig Erlam, chief strategist at Oanda, said in an interview with The Street that, “We’ve seen seven consecutive days of losses in oil. I think the fundamentals are strongly against oil at this stage and we’re still seeing this oversupply story. Even if we see production in the U.S. drop off further, it’s only slightly below the highest level we had in the middle of last year.”
Basically, it is much of the same story we are hearing day in and day out, as the current oversupplied crude oil market has no choice but to cut prices. There is no saying what the future holds for crude oil either, as
