Posted on January 15, 2015
Gold Spot Price Open: $1,240
Gold Spot Price Close: $1,265
Change in Gold Spot Price: +25
Silver Spot Price Open: $17.01
Silver Spot Price Close: $16.96
Change in Silver Spot Price: -$0.05
Precious metals spent most of Thursday gaining value but ended the day mixed. When all was said and done, gold gained more than 20 dollars while silver lost about 5 cents. Platinum and palladium had mixed days on Thursday, with platinum finishing up by more than 30 dollars while palladium fell by about ten. Palladium has now been on an extensive slide for 2 consecutive days.
Though metals opened up the day posting gains, those gains were accelerated upon a surprising announcement made by the Swiss National Bank. Early this morning, the SNB announced that it is going to immediately unpeg the Swiss Franc from the Euro currency. This news immediately sent the global marketplace into a panic that saw financial, equity, and currency markets from around the world suffer.
For the Franc, today’s move saw its value appreciate by more than 20%. In case you were unaware, the SNB initially decided to peg the Franc with the Euro in 2011 in an effort to prevent the Franc from rapidly appreciating. Now that this move has been made, it will be very, very interesting to see what the European Central Bank has to say at their meeting next week.
As of now, the market is expecting the ECB to announce the implementation of their quantitative easing-style bond-buying program, but more information could possibly be laid on the table. With that said, it will be incredibly important for all investors to pay close attention to next week’s ECB meeting.
Though we are barely more than 2 weeks into this New Year, it doesn’t take too much analysis to discover that the global marketplace is in a state of flux. Though financial, equity, and currency markets are always moving around in one direction or another, these past two weeks have seen equities swing in value dramatically, currencies be turned on their head, and a court decision that more or less guarantees Europe will be seeing quantitative easing measures in the near future. This is all added to the more than 2-month slide on the part of crude oil.
Because of the uncertainty now facing investors, many market experts feel as though it will be incredibly difficult for the Fed to pull the trigger on raising interest rates anytime soon. It has already been established that interest rates will likely remain put through this year’s first quarter, but a growing number of people are convinced that it may not be until 2016 that we see interest rates raised.
When it comes down to it, however, market experts are pointing to the plunge in crude oil’s value as well as deflation concerns as the two main reasons why interest rates will remain at current levels for the foreseeable future. For precious metals, this growing belief has benefited them greatly and will likely continue to do so.
Now I do not want to sound too confident, but there is a small but growing inkling that precious metals, particularly gold, may be gaining the near-term technical advantage as well as a solid amount of upside momentum. It has been a long time since the market was truly bullish on gold, so we will have to proceed with caution and see what the last day of this week has in store.