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    JM Bullion Gold and Silver Market Update (1/27/16)

    Posted on January 27, 2016

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    Gold Spot Price Open: $1,121

    Gold Spot Price Close: $1,127

    Change in Gold Spot Price: +$6

    Silver Spot Price Open: $14.60

    Silver Spot Price Close: $14.55

    Change in Silver Spot Price: -$0.05

    Precious metals added to gains on Wednesday thanks to many of the same factors that have been helping them along all week. When all was said and done on Wednesday, gold managed to gain about 6 dollars while silver actually lost a few pennies. Platinum and palladium both made gains today as well, but their gains were limited to a few dollars shy of 10.

    Fed Meets, Holds Rates at Current Levels

    While the monthly meeting of the Federal Reserve is something that is hawked over by investors everywhere, this month that much was not the case. The reason for this is due to the simple fact that interest rates have already been raised and much is not expected to come from the United States’ central bank for some time.

    In a statement, the Fed today said that they will be retaining interest rates at their current levels for the time being. The Fed went on to say that it will be closely monitoring global economic conditions in order to gauge the appropriateness of further interest rate hikes or any other possible monetary policy alterations. The official statement from the Fed read, “The committee is closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation.”

    Reading between the lines were most investors who are now under the assumption that interest rates will not be raised at the Fed’s March meeting, despite it being widely believed that they would be. Of course, the Fed has the freedom to make whatever policy decisions they so choose, but the fact of the matter is that most everyone agrees that interest rates in the US should be kept at current levels, at least for the time being.

    Dollar Falls Against Euro, Yen

    In response to the Fed’s inaction, the greenback continued sliding on Wednesday. Against currencies such as the euro and the yen, the Dollar lost even more momentum mostly due to the fact that interest rates were not raised, but mostly due to the fact that rates are not expected to be touched until the middle of the Spring, at the absolute earliest.

    If the Fed would have stuck to a more aggressive interest rate hike plan, as was originally laid out, the Dollar might have been able to make nice gains against currencies like the euro that are actively being devalued.

    Lane Newman, director of foreign exchange at ING Capital put the current marketplace perfectly into perspective when he explained to CNBC that, “We’re getting to the end of the month, and equities are down 6 or 7 percent to start the year; in China those moves happen every day … and crude oil, there’s no bid until there is and it goes up nine percent in a day. So it’s a bit of all over the place like a mad woman’s breakfast.”
    All in all, the first half of this week has been none too beneficial for the US Dollar and it is not looking like that is going to change through the last two days of the 5-day trading session.

    Wrap-Up

    Wednesday was great because it saw spot values continue the momentum that was first attained towards the end of last week. As we head into Thursday and Friday it will be interesting to see if gold and silver can continue making gains. For now, market conditions are in the favor of gold and silver, but there is no guaranteeing that such will remain the case by week’s end.

    All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.