Gold Spot Price Open: $1,212
Gold Spot Price Close: $1,203
Change in Gold Spot Price: -$9
Silver Spot Price Open: $17.21
Silver Spot Price Close: $16.98
Change in Silver Spot Price: -$0.23
Precious metals backtracked again on Wednesday as the week is slowly but surely turning into a negative one for gold and silver. When all was said and done, gold lost about 11 dollars while silver lost more than 20 cents. Platinum lost 18 dollars while palladium ended up losing more than 55.
Trump Optimism Pressures Metals
After signing a slew of Executive Orders during his first few days in office, President Trump is giving investors more reason than ever to believe that he is going to be a great proponent of US economic growth. As a result of that general and growing belief, stocks are beginning to pick back up after falling from historic highs realized only a month or so ago.
All major stock indexes in the United States finished having made nice gains, and similar stories were solidified earlier in the day by economies across Europe and Asia. In addition to all of this Trump talk, stocks around the world were also lifted thanks to upbeat Japanese trade data as well as earnings reports from European companies that mostly beat expectations.
To put into perspective just how great today was for US stocks, the Dow Industrial Average moved above 20,000 for the first time ever. The US Dollar, on the other hand, is still treading water and slowly but surely moving downward. While this may be helping to mitigate some of the losses incurred by precious metals, the overly upbeat stock indexes are preventing any gains from being made by gold nor silver.
Describing the week thus far was Walter Pehowic, who said, “As equities take all the headlines, profit-taking and new short positions by Wall Street gold traders are taking hold.”
Palladium’s Worst Day in 10+ Years
We do not talk about the metal all that much, but today it was impossible to ignore the price action of palladium. In case you missed the opening paragraph, palladium’s spot value lost more than $50 on the day; this marks the worst day of trading for the metal in more than ten years.
The metal’s drop is due to a lot of investors cashing in on what proved to be an absolutely fantastic beginning of the year. From a day or so after the Christmas holiday up until the beginning of this week, palladium’s spot value went from roughly $675/ounce to just shy of $800/ounce during the middle of the day yesterday. As a result of the metal’s spot value making such impressive strides in less than 4 weeks, investors decided to cash in and that, for the most part, helps explain the price action of palladium on the day. Even with today’s losses the metal is still in a far better position now than it was a month ago. What will be interesting to see is whether the metal will continue its losing ways to close out the week, or if things will bottom out and stabilize. For some perspective, palladium is often viewed as a more volatile precious metal, so while today did emit somewhat shocking price action, those that follow the metal closely are not going to lose any sleep over it.
Wrap-Up
All in all, Wednesday was fairly uneventful save for the large losses accrued by palladium. Precious metals, as a group, have been performing questionably all week long and have been losing ground thanks to renewed strength on the part of equities. As we head into Thursday, the weekly jobless claims report will be on the table. In addition, it is almost a certainty that more Donald Trump news will be dealt as well.
