Posted on January 28, 2016
Gold Spot Price Open: $1,120
Gold Spot Price Close: $1,117
Change in Gold Spot Price: -$3
Silver Spot Price Open: $14.55
Silver Spot Price Close: $14.32
Change in Silver Spot Price: -$0.23
Precious metals ended the day near even, but some profit-taking after recent gains meant that Thursday was never going to be an overly upbeat day for gold nor silver. When all was said and done, gold lost about 3 or 4 dollars while silver declined by more than 20 cents. Platinum and palladium also declined on the day, with both metals losing a bit more than ten dollars apiece.
When global markets opened up Thursday morning, the talk of the town was the fact that the Federal Open Market Committee left interest rates unchanged in the wake of their meeting Wednesday. While this decision, or lack thereof, was more or less expected, it did have a negative impact on the US Dollar, something that helped metals move slightly upward yesterday.
In a statement made after the meeting concluded, the Fed did well to confuse global investors through its wording. On one hand, the Fed alluded that current global market conditions are such that policy changes will need to be curbed for an extended period of time. On the other hand, however, no individual members of the Fed stated concerns about recent equity sell-offs which led investors to believe that the Federal Reserve is not so concerned about what has taken place through the first 4 weeks of this year.
In other news, crude oil prices were moving upward today thanks to rumors that OPEC, the Middle Eastern oil cartel, will soon meet to discuss the possibility of reducing production in order to stabilize/drive up prices. How successful these talks will be is up in the air for now, because many OPEC member-nations see no benefit in reducing their crude oil output and would rather produce more oil for less money than curb production altogether. There is not an official date set for these talks, but I would not be surprised to see member countries convene within the next two weeks or so. In addition to all of this, Russia has hinted that they may coordinate with some Middle Eastern oil-producing nations in order to reduce the overall supply of oil that seems to grow with each passing week.
Thanks to the release of some less than stellar European economic data, equity markets across the region did not perform particularly well on Thursday. The major culprit behind a lackluster Thursday was economic confidence across the EU falling to a 5-month low. It is no secret that Europe has been struggling economically, and today proved that this poor performance is beginning to weigh on what people are expecting from the EU this year.
Concluding today’s data was the weekly jobless claims report from the United States, and it showed that 16,000 fewer applicants filled for benefits than the week before. This was far better than what was expected and works to derail the belief that the US employment sector is beginning to fall behind. Looking ahead to tomorrow, it will be truly interesting to see if gold and silver can end the trading session on a positive note or not. Right now we are looking at weekly gains for both gold and silver, but another day like today to close out the week may see all gains disappear. There isn’t much in the way of markets-moving economic data expected to be made public on Friday, so I am anticipating a slow end to the week.