Posted on January 26, 2016
Gold Spot Price Open: $1,108
Gold Spot Price Close: $1,122
Change in Gold Spot Price: +$10
Silver Spot Price Open: $14.32
Silver Spot Price Close: $14.56
Change in Silver Spot Price: +$0.24
Precious metals finished Tuesday having made daily gains for two consecutive days. When all was said and done, gold managed to gain a few more than five dollars while silver improved by nearly 10 cents. Platinum and palladium also gained on the day, with both metals picking up nearly ten dollars apiece.
Home prices rose in November at a much faster rate than was expected thanks to a variety of factors, but mostly due to the shortage of homes on the market. Other factors contributing to the surge in home prices were the increased number of job hires as well as low mortgage rates. According to the S&P/Case-Schiller 20-city home pricing index, November 2015 prices were nearly 6% higher than they were a year ago.
As for the wider picture of the housing market, home prices across the country are just a mere 5% below the all-time high reached nearly 10 years ago. Clearly, the US housing market has made a dramatic recovery from the 2008 recession that sent the global economy into a downward spiral. In fact, metro areas such as San Francisco and Dallas have already reached or surpassed their all-time price highs and are looking to move even further upward. Even with interest rates being raised, the US housing market appears to still be very strong and resilient. It will be interesting to see if data from the early parts of this year follow suit.
It has been a while since we have said this, but gold appears to be building a slight uptrend in recent weeks. Today, gold’s spot value flirted with a 3-month high as safe-haven demand for the metal continues to drive values upward. As you probably guessed, the main culprit behind gold’s rise is the slumping nature of crude oil prices. Taking things one step further, it is also poor crude oil prices that are hurting equity markets in the US, Europe, and elsewhere around the world.
Energy and mining companies are seeing their shares head downward at seemingly every turn, and this kind of massive downswing is bringing the entire marketplace with it. For precious metals it will be interesting to see if gains made over the past few days will be able to be sustained or even built upon over the short to medium term. If things play out the way most people are expecting them to, an additional injection if Iranian oil may push the already lingering supply-glut even further. However, there is a chance that investors will begin to factor higher crude oil prices into their decisions, which is something that may end up putting a halt to precious metals’ successes.
For now, it is nice to see gold up above $1,100/ ounce while silver is sitting safely above $14/ounce.
For precious metals, the first few days of this week have been beneficial and seen spot values surge to multi-week highs. As we edge in on the middle and latter parts of the 5-day trading session, however, some important US economic data may threaten to derail gold and silver’s gains. Among those reports will be the ever-interesting weekly unemployment claim report. After two weeks of first-time claims rising, this will be a pivotal test for US employment.