Posted on January 22, 2015
Gold Spot Price Open: $1,293
Gold Spot Price Close: $1,303
Change in Gold Spot Price: +$10
Silver Spot Price Open: $18.24
Silver Spot Price Close: $18.44
Change in Silver Spot Price: +$0.20
After beginning the day hovering near even, metals rode a none-too-surprising move by the European Central Bank to finish the day having posted gains. After all was said and done, gold managed to add about ten dollars worth of value while silver improved by roughly twenty cents. Platinum and palladium gained too, adding between 5 and 15 dollars apiece.
Unless you have been completely out of touch with the financial and economic worlds lately, you are fully aware that the European Central Bank was expected to announce a monetary stimulus package today. That is exactly what happened, and though the announcement regarding the implementation of quantitative easing measures was not surprising at all, the extent of the ECB’s QE plans was.
Prior to this morning’s announcement by ECB president Mario Draghi, the market was expecting to hear of a QE plan that included €50 billion worth of bond purchases each and every month. Much to the surprise of almost everyone, however, Draghi unveiled a €60 billion QE plan that is set to begin in March of 2016 and run through September of that same year. While it is nice to see Europe’s central bank do something to help spur along the region’s many struggling economies, many economists do not think that QE measures are enough to bring the EU out of its economic rut.
According to press release from the World Economic Forum, there were plenty of people who agreed that QE alone will not solve all of Europe’s problems. Larry Summers, a world-renowned economist, commented, saying, “We’re all for quantitative easing in Europe, but it’s not enough.” Summers went on to say that while QE very well might help the EU, it will not be as successful there as it was in the US due to presently low interest rates across the EU as well as European banks’ inability to inject money into the wider economy. Still, it will be interesting to see, when it finally gets underway, just what kind of effect QE has in Europe. As a result of today’s announcement, stocks in Europe as well as the United States rose, as did the US Dollar. Precious metals also reacted positively and almost immediately turned marginal losses into decent gains.
After last week’s jobless claims figures came back much higher than expected, investors were hoping for a turnaround this week. To be fair, however, last week’s jobless claims figures shouldn’t come as too much of a surprise considering many big-box retailers are in the process of or have just completed letting go of seasonal workers.
This week, jobless claims fell to 307,000. Though anything over 300,000 is none too favorable a reading, it was encouraging to see weekly jobless claims fall by 10,000. With so much focus on today’s European Central Bank meeting, the weekly jobless claims data did not have that much of an impact on the Dollar nor US Stocks. As we advance further into this year, the status of the US employment sector will be a hot-topic issue for investors both in the United States and elsewhere around the world.
As if it weren’t already obvious, today was always going to play host to a marketplace that saw investors focus almost entirely on the European Central Bank meeting. As we head into the final day of the week tomorrow, it is highly likely that we will see continued reaction from today’s ECB announcement. In addition to this, investors will have some economic data to pay attention to, though I do not think it will have any sort of major impact on the global marketplace.