Posted on January 06, 2015
Gold Spot Price Open: $1,202
Gold Spot Price Close: $1,220
Change in Gold Spot Price: +$18
Silver Spot Price Open: $16.19
Silver Spot Price Close: $16.60
Change in Silver Spot Price: +$0.41
For a second consecutive day, gold and silver posted impressive gains thanks to equities that are continuing to suffer as a result of global economic concerns held by investors. When all was said and done, gold was able to gain just short of 20 dollars while silver’s gains eclipsed 40 cents yet again. As it stands, gold is sitting at a 3-week high after these past two days’ worth of gains. Platinum and palladium also finished the day in the green, both up by about ten dollars.
Most global stock markets saw follow through selling on Tuesday after massive losses piled up on Monday. Investors are growing increasingly concerned about the status of the global economy as the price of crude oil continues to suffer. With crude oil still on the decline, investors cannot help but worry about the possible ramifications this price decline will have with regard to price deflation.
In addition to crude oil worries, the market is also finding itself overly concerned with all aspects of the European Union. In recent weeks, we have seen our attention drawn to politics in Greece, financial concerns in Spain and Italy, and a continuation of a poor economic data trend. Clearly, there is a lot going on in Europe, and for that reason we will continue to pay very close attention to just about every development across the region. Looking ahead, the market is anxiously awaiting the next meeting of the European Central Bank, which is set to happen within 2 weeks.
As if it weren’t made obvious by the continued decline of global stock markets, the price of crude oil fell to a new low today. Now, the price of a barrel of crude oil is just over $47.50, which is a new 5.5 year low. According to a number of industry experts, the spot value of a barrel of oil very well might dip into the lower $40s sometime in the not so far off future.
While oil continues to have a rough go of things, the US Dollar is performing extremely well. The USD Index ended the day on Tuesday near a 10-year high. Surprisingly, gold and silver are able to continue making gains despite the greenback’s solid performance this week and over the last few weeks.
Making conditions absolutely perfect for the US Dollar to make gains is the fact that the Euro is continuing on its downward trend. The Euro is suffering due to the widespread belief that the ECB will act to further stimulate the EU economy at their upcoming meeting. Making matters worse for Europe was a poor piece of economic data released during the early morning hours of Tuesday. According to the report, the EU’s Markit PMI came in at 51.4 in December; up .3 from November’s reading. While December’s PMI being better than November’s is undoubtedly positive, the rise was not nearly as robust as expected and, thus, was deemed disappointing.
As we head further into this week, it will be interesting to see if stocks are able to bounce back in any capacity. If equities continue to suffer, it is highly likely that metals will continue having an upbeat start to this New Year. In addition to continued attention being given to global equities, investors will have even more economic data to contend with, most important of which will be from the European Union.