Posted on January 05, 2015
Gold Spot Price Open: $1,188
Gold Spot Price Close: $1,206
Change in Gold Spot Price: +$18
Silver Spot Price Open: $15.84
Silver Spot Price Close: $16.24
Change in Silver Spot Price: +$0.40
Gold and silver finished the day sharply higher and got the first trading week of 2015 off to a good start. When all was said and done, gold picked up more than 14 dollars while silver’s gains eclipsed 40 cents. Platinum and palladium also managed to gain some value on a day when precious metals were really hitting on all cylinders.
Prior to US markets opening today, things were generally quiet around the global marketplace. While precious metals were posting modest gains, the currently bearish market led most people to believe that those small gains were going to be done away with by the time trading in the US got underway.
Much to the surprise of everyone, however, spot values only improved as the day went on, thanks, in large part, to the sell-off of US equities. Thanks to recently massive gains, the Dow, S&P, and Nasdaq all began to see profit-taking take its toll. Though most investors are still bullish on the US economy, today illustrated perfectly just how quickly market conditions can change. Sparking the equity downturn in the United States was a dip in the price of crude oil to under $50/barrel. Though the price of oil recovered a bit, this small dip sent the marketplace into a bit of a panic.
Surprisingly, gold and silver are posting gains on a day when the US Dollar is also posting some solid gains. Typically, both gold and silver lose a lot of ground when the Dollar performs better, but such was not the case today. With that being said, I do not imagine that metals will have an easy time hanging on to today’s gains simply because of how bearish current market conditions are.
As was previously stated, the US Dollar is performing well to start off this new week. The main reason behind the Dollar’s strong performance is the fact that the Euro hit fresh, multi-year lows before US markets even opened. Because of an apparent Greek election victory by a candidate that fervently opposes the ongoing Greek bailout, investors have grown concerned over the growing debt facing countries like Greece, but also Spain and Italy.
The eyes of the market are looking ahead to the upcoming European Central Bank meeting simply because it is widely expected that an announcement regarding government bond purchases will be made. This announcement, if made, will only serve to intensify the diverging nature of US and EU monetary policies. As the year moves on, the market will continue to pay close attention to anything and everything happening with regard to the wider EU economy.
Despite there not being all that much economic data for the investing world to mull over today, price action on the part of equities absorbed most of the market’s attention. This will continue to be the case as the week plays out, but I also expect that a good bit economic data will also be made public. In addition to this, investors are anxiously awaiting the upcoming ECB and FOMC meetings as they are bound to emit some useful, pertinent information for the market.