Posted on January 14, 2015
Gold Spot Price Open: $1,238
Gold Spot Price Close: $1,230
Change in Gold Spot Price: -$8
Silver Spot Price Open: $17.20
Silver Spot Price Close: $16.89
Change in Silver Spot Price: -$0.31
Gold and silver spot values began the day posting gains, but by the time markets closed, those gains were quickly whittled away. When all was said and done, gold lost about a dollar while silver pulled back by roughly ten cents. Platinum also saw minor losses, but palladium fell dramatically, by more than 40 dollars.
With Christmas falling in the month of December, it really isn’t all that surprising that December retail sales are expected to be some of the year’s best. This, more often than not, is the case in the United States. This time around, however, December retail sales fell by just short of 1 percent—a reading that fell far short of what was expected.
As a result of this poor report, both stock in the US as well as the USD Index were prompted to trend slightly lower. Stocks have been faring poorly for the better part of the last few weeks, but the Dollar has been a shining light and has consistently been making gains against rival currencies. Though the USD is still in very good standing overall, today was subtle reminder that just because an asset is doing fine for an extended period of time does not mean that are immune to downbeat economic data, no matter how insignificant it may seem.
There was big news out of Europe today as the European Court of Justice’s advocate general determined that the proposed bond-buying initiative set to be put in place by the European Central Bank was, in fact, legal. This news immediately sunk the Euro to a fresh 9-year low against the US Dollar.
The big takeaways from today’s report is that the European Central Bank is allowed to pursue unusual measures to spur economic growth so long as they are fully explained and understood by the EU’s ruling body. In addition to this, the European Court of Justice also determined that the ECB is legally allowed to purchase European sovereign debt as a method of curing the region’s economic woes.
Naturally, because of today’s ruling, the marketplace is without a doubt expecting the full bond-buying plan to be announced at the January 22nd meeting of the ECB. Though it is not guaranteed that such an announcement will be made, early indications are strong that it will be.
In other European news, today it was announced that Russia’s central bank is looking to replace its head of monetary policy. Of course, with Russia in financial and economic shambles, this move should not come as too much of a surprise. Now, it will be interesting to see who fills the void in Russia and what kind of policy moves he or she will make. As we advance further into 2015, I expect that Russia will continue to be in and out of the headlines as they have many economic issues to tackle, and fast.
As the week moves forward, you can expect that the market will continue to preoccupy itself with marveling at the price action of US equities as well as the US Dollar. It will definitely be interesting to see if the Dollar can bounce back from today’s minor hiccups, but market conditions are such that most are expecting the greenback to uptick again before the week is through. Investors will also have plenty more economic data to mull over and discuss.