Posted on January 18, 2016
Gold Spot Price Open: $1,092
Gold Spot Price Close: $1,091
Change in Gold Spot Price: -$1
Silver Spot Price Open: $14.00
Silver Spot Price Close: $14.00
Change in Silver Spot Price: NO CHANGE
Precious metals bounced between small gains and small losses to start out a week of plenty of economic data. When all was said and done, gold lost about a dollar or two while silver finished in about the same position as where it started. Platinum and palladium finished the day mixed, with neither metal moving too far in any single direction.
With many Americans away from the workplace due to the observance of the Martin Luther King Jr. holiday, US markets were a bit quieter than normal to begin the week. The same, however, cannot be said of China who opened up the week having published a few bits of economic data from the end of the year.
The first bit of data was from China’s Central Bank and it indicated that money was leaving China at a fairly rapid pace during the final month of 2015. This was yet one more indication that people are more readily abandoning the Chinese economy as it continues to show a very clear pattern of slowing down. Furthering the poor outlook on the Chinese economy was another bit of data that showed China’s foreign-exchange currency reserves taking a massive hit during December. Not only was December’s decline the reserves’ biggest decline ever recorded, it also brings the reserve holding to its lowest value in almost three years. This is mostly due to the yuan’s continued weakening against the US Dollar.
As US traders make their way back to the marketplace tomorrow, you can bet that there will be at least some sort of discernable reaction to today’s Chinese data. What’s more, we will keep you posted as to what other pieces of Chinese data are made public this week.
As far as economic data is concerned, Monday did not really get things off to such a high-flying start. According to the Commerce Department, seasonally adjusted retail sales fell by one tenth of one percent in December, bringing the year to a relatively somber conclusion. After climbing in November, December’s retail sales figures turned off much of the market to the idea that the US economy is still hanging in there despite weakness elsewhere around the world.
Falling gas prices also put a damper on retail sales. All in all, the continued slacking on the part of consumer sales has a lot to do with people’s decision to buy online rather than in store. With extreme convenience offered by stores such as Amazon, consumers are simply not finding themselves in retail stores as much as they once were. When it comes down to it, people not buying in brick and mortar stores is something being offset by online purchases, so it may be confusing trying to figure out why retail sales are doing so poorly. Though there is no easy answer, a major contributor to this is the fact that gas prices are continuing to fall. You see, the Commerce Department retail sales report does not account for the changing price of gasoline. Understanding this, it is easy to see why a massive decline in the price of gas at the pump has also led to a massive decline on the part of retail sales overall.
You can also see, however, that statistics can be misleading. This is so because while retail sales on the whole are down, the average American consumer has more disposable income thanks to an improving employment sector as well as gas prices that are saving consumers money every time they fill up their tank.
Despite today being more of a slow trading day than anything else, there was plenty of information out there for investors to mull over and discuss. For one, China is gearing up for a big week of economic data. In addition to that, investors have plenty of US economic data to mull over as well. With sanctions on Iran having just been lifted over the weekend, this week is looking like it will have no choice but to yield a good bit of price action on the part of most market sectors.