Posted on January 19, 2016
Gold Spot Price Open: $1,091
Gold Spot Price Close: $1,089
Change in Gold Spot Price: -$2
Silver Spot Price Open: $14.02
Silver Spot Price Close: $14.11
Change in Silver Spot Price: +$0.09
Precious metals opened up the day Tuesday by not really partaking in much movement at all. When all was said and done, gold lost about a dollar while silver posted gains of a few pennies shy of 10 cents. Platinum and palladium trended upward for much of the day, but gains made by these metals were minimal to say the least.
The International Monetary Fund announced that it is cutting its expectations for global economic growth this year, thanks to a variety of different factors. According to the IMF, global growth expectations are 3.4%, up from the forecasted 3.1% growth expected to be seen in 2015. Though this year’s growth expectations are better than 2015’s forecast, today’s growth expectation was .2% lower than originally forecast last October.
In its official statement, the IMF said “pickup in global activity is projected to be more gradual than in the October 2015 World Economic Outlook, especially in emerging market and developing economies. Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy.”
Among the many factors that may negatively influence global economic growth, higher interest rates in the US and slow industrial production from China were two of the biggest factors slowing global growth. On top of all of this, commodities including precious metals and crude oil are continuously moving downward.
The IMF is one of the biggest commentators on the global economy, and investors buy-in heavily to what they have to say about global growth expectations. At this point, however, you will be hard-pressed to find anyone who does not agree with the IMF’s outlook. After all, global growth in the last few months alone has been a shadow of what it was expected to be.
As if this were some sort of shocking headline, crude oil prices continued their extended trip downward on Tuesday. Today, the International Energy Agency came out and said that commodities, specifically crude oil, are likely to fall even further thanks to Iranian crude oil making its way to Western markets after being banned for more than a decade.
Also according to the IEA, the influx of Iranian crude oil will create a surplus of more than 1 million barrels per day through the first 6 months of the year. In response to sanctions being lifted, Iranian crude oil companies ramped up production in anticipation of more oil being exported.
In other news today, China released some poor economic data during the overnight hours. China’s year-end economic data fell to 6.8% thanks to consumer spending that moved considerably downward. Though this data is perhaps the worst we have seen from China in the last 10 years, it was mostly expected seeing as China has been on a run of poor economic data over the course of the past few months.
Gold and silver, for a second day this week, did not do much moving and ended the day in roughly the same positons they were in when they started the day. As we move further into this week, I am anticipating that gold and silver will continue to falter as stocks take any ounce of momentum away from commodities.