Posted on January 07, 2015
Gold Spot Price Open: $1,218
Gold Spot Price Close: $1,213
Change in Gold Spot Price: -$5
Silver Spot Price Open: $16.61
Silver Spot Price Close: $16.58
Change in Silver Spot Price: -$0.03
Gold and silver spent most of the day losing value, but by the time market’s closed, were able to stabilize a bit. When all was said and done, gold lost about 5 dollars while silver lost around 3 pennies or so. Platinum and palladium both posted losses on the day, but those losses did not extend far past 10 dollars at any point in time.
After Monday and Tuesday brought about nothing but big-time losses for US equity markets, those same equity markets recovered nicely on Wednesday. Once again, energy shares led the way and after two days of losses, it was encouraging for investors to see energy shares bounce back after considerable losses. Crude oil did not fare too poorly at all on Wednesday, though it must be said that the spot value of the commodity is still far from great.
Some US economic data that likely helped equities was a report claiming that not only did the US trade deficit narrow a bit towards the end of 2014, but corporate entities also added more employees than was previously anticipated. Explaining things about as simply as one possibly can was Randy Bateman, chief investment officer at Huntington Asset Advisors, when he said, “We had some good economic news and the market got tired of going down.” He added that “there’s some interest as to what the Fed’s mindset is right now. They certainly don’t have to worry about inflation and if employment is doing OK, I don’t see them in any rush to do anything.”
The minutes from the Federal Open Market Committee’s December meeting were made public today and, as expected, painted a picture of a Fed that is in no rush to make changes to monetary policy. According to the Fed, interest rates will likely remain at their current, near-0 levels at least through the first quarter of this year. Still, with data as upbeat as recent US economic data has been, so many people are wondering why on earth the Fed is remaining so cautious.
According to the ADP Research Institute, companies in the US added more than 240,000 new workers during December. Adding to the upbeat news was another report claiming that the United States’ trade deficit shrank to its narrowest position since December of 2013, at 7.7%. As this week gives way to next week, I and many others anticipate that even more economic data from the United States will be made public. Of course, investors will also be curious to see what the FOMC has to say at their upcoming meeting, though I do not think they will make any groundbreaking monetary policy decisions.
Despite their losses today, gold and silver are still in solid positions, above $1,200 and $16.50 respectively. As the week moves forward, the marketplace will still be almost entirely focused on global equity markets as well as how the price of crude oil affects them. Should crude oil take another decent dip downward in the forthcoming days, I would not be at all surprised to see metals build upon Monday and Tuesday’s gains. With plenty of economic data still on the slate, this week is far from being finished.