Posted on January 22, 2016
Gold Spot Price Open: $1,097
Gold Spot Price Close: $1,100
Change in Gold Spot Price: +$3
Silver Spot Price Open: $14.14
Silver Spot Price Close: $14.11
Change in Silver Spot Price: -$0.03
Gold and silver ended the week mixed, but will look back on this 5-day trading session having made some minor gains. When all was said and done on Friday, gold managed to eek out gains of about three dollars while silver fell by a few pennies. Platinum ended the day by moving upward to the tune of 13 dollars, but palladium struggled and finished with losses of a few dollars.
As soon as markets opened, the talk on the street was of the possibility of further economic stimulus pursued by the European Central Bank. Mainly, investors were concerned with when stimulus might be able to finally happen. As we learned yesterday, it may be a few months before any sort of changes are made by the ECB.
Thanks to investors cashing in, crude oil rebounded by more than 8% to close out the week. Unfortunately, this did not help precious metals at all simply due to the fact that the same factors that drove oil down in the first place are still very much alive. A supply glut is still persisting and the looming likelihood of Iranian crude oil being sold on Western markets are two factors pushing the value of oil downward. Until those fundamental factors change, it is not likely that crude oil will see anything resembling sustained gains.
Energy stocks led a massive equities rally that occurred across the globe on Friday in response to crude oil’s gains. Even though a crude oil rally is typically beneficial for precious metals, today that was not the case due to the fact that fundamental market factors have not really changed. When markets open up next Monday, it will be interesting to see if crude oil can sustain this rally or if things are doomed to return to normal, so to speak.
It wasn’t only crude oil and stocks that performed well on Friday, because the US Dollar also made nice gains to end the week. The Dollar gained about 3 percent against the yen on Friday thanks to a widespread and growing belief that the Bank of Japan will move to introduce additional monetary easing.
Helping boost the dollar on Friday was a housing report from the US that showed existing home sales improved by almost 15% during December. Not only is this a record, it does well to dispel November’s poor housing data and once again convince investors that the US housing market is in good shape even with boosted interest rates. For the year of 2015, existing home sales improved by 6.5%, making 2015 the best year for home sales since 2006. While the housing market may not do as well this year, momentum has been established and most experts are expecting the housing market to continue doing quite well.
All in all, this week was not overly beneficial nor overly poor for gold and silver. When all was said and done, both gold and silver had small gains to reflect on, but that is nothing to write home about. With a major winter storm bearing down on the Eastern United States, it will be interesting to see what kind of impact, if any, this has on markets in the US. For crude oil, the storm is good news because it means that demand for heating is going to pick up, much like it has since the beginning of the month.