Posted on January 23, 2015
Gold Spot Price Open: $1,302
Gold Spot Price Close: $1,295
Change in Gold Spot Price: -$7
Silver Spot Price Open: $18.39
Silver Spot Price Close: $18.33
Change in Silver Spot Price: -$0.06
Precious metals conceded value to close out the week, but all in all, the last 5 days have seen metals come out on top. When all was said and done on Friday, gold lost more than five dollars while silver lost a little more than five cents. Platinum and palladium both lost on the day as well, by about ten dollars apiece.
Though it really shouldn’t come as much of a surprise, yesterday’s decision by the European Central Bank to announce its quantitative easing plans has resulted in nice gains for the Dollar. The Euro, which is now at more than 10-year lows against the greenback, has suffered even more hits in the wake of the ECB’s decision and is expected to continue depreciating throughout the foreseeable future. For gold and silver, the stronger Dollar means that an increasing number of investors may be ditching their precious metals in search of larger gains in the currency market. As we look ahead to next week, it will be interesting to analyze the type of impact a continuously stronger Dollar will have on precious metals.
In case you missed it, yesterday saw the European Central Bank announce their plans to introduce a quantitative easing-style monetary policy to the EU region. Officially, the QE plans will see the ECB purchase 60 billion euros worth of bonds beginning in early 2016. Though some people have their doubts with regard to the effectiveness of such a plan for the EU, we will just have to wait and see how things play out. After all, there is still quite a bit of time before QE actually goes into effect.
If you can recall, November’s existing home sales were some of the worst we have seen in the past 12 months. This single piece of data, released more than a month ago now, played a major role in unsettling investors who were otherwise bullish on the US economy. Luckily, December’s existing home sales shot up by nearly 2.4% and effectively eliminated most doubts people had regarding the housing market in the United States. Today’s data came to the aid of the US Dollar and, in all reality, likely weighed on precious metals,
As we head further into 2015, you can bet that global investors will have their attention firmly fixated on the status of the US employment sector as well as the housing market. These two factors will continue to be very important for investors who are trying to accurately gauge the strength and direction of the US economy.
A noteworthy event came yesterday in the form of the death of Saudi King Abdullah. The Saudi leader died as a result of a lung infection and his death has sent more shock waves of uncertainty across the global marketplace. Abdullah’s half-brother, now named King Salman, has ascended to the throne of the large Middle Eastern nation and has vowed that his country will continue to reform itself in a number of different ways.
What this means for the wider global marketplace remains unknown, but we will continue to keep a close eye on Saudi Arabia as the year moves forward. Being that Saudi Arabia is a massive exporter of crude oil, it is likely that the death of Kind Abdullah will, in some way, effect the global crude oil market.
As if it weren’t already painfully obvious, this week played host to quite a bit of economic activity. The biggest event of the week came in the form of the ECB’s decision to implement quantitative easing measures, but other factors also played into this 5-day trading session. For gold and silver, the past 5 days have been extremely beneficial and have seen spot values edge above key points of technical resistance. As we look ahead to next week, it will be interesting to see if metals can sustain recent gains or if profit-taking and other factors will push spot values back downward.