Gold Spot Price Open: $1,168
Gold Spot Price Close: $1,188
Change in Gold Spot Price: +$20
Silver Spot Price Open: $16.00
Silver Spot Price Close: $16.26
Change in Silver Spot Price: +$0.26
Gold and silver continued to venture forward on Wednesday thanks to an increasingly bleak outlook regarding the US and global economies. When all was said and done, gold managed to gain twenty dollars while silver’s gains exceeded 20 cents on the day. Platinum was up by nearly 10 dollars while palladium surged forward, adding more than $20.
Dollar Near 4-Week Low on Weak Economic Data
The US Dollar spent most of the day hovering near a 3.5-week low thanks to the state of the global economy at present. Slowing economic growth in the US and China are stoking fears that the Fed may not be able to hike interest rates this year. In fact, some are now beginning to wonder if a rate hike in early 2016 is even a possibility. So long as economic data continues to disappoint from the world’s two largest economies, the likelihood that rates will be raised this year will diminish quickly. Michael Arone, of State Street Global Advisors, put it simply when he said that “The dollar is weakening because of the expectations that a Fed rate hike is being pushed further and further out.”
A consumer inflation report from China came back disappointing today and that much falls about in line with what the market has been experiencing lately. Niels Chirstensen, a currency strategist, commented on China by saying that a “clouded outlook for China can be used as an argument by the Fed to postpone a rate hike. In any case we are seeing more and more Fed members arguing against a rate hike.” With the FOMC’s October meeting just around the corner, it will be interesting to see what the Fed has to say and how that commentary affects the global marketplace.
US Stocks Slump
Giving gold and silver even more room to move forward was the fact that US equities performed particularly poorly today. Wal-Mart, which saw its shares decrease by nearly 8% today, lost a lot of momentum due to diminished expectations for 2016 earnings. The company was quoted as saying that investments in technology and increased employee wages are the two main factors behind why 2016 earnings are not expected to impress. Today saw Wal-Mart shares trade at their lowest levels in more than 3 years.
September retail sales were recorded as having improved by .1% on an annualized basis, which falls right in line with market expectations. Though September’s reading is a bit better than August’s flat reading, retail sales are clearly struggling at the present moment in time. One bright spot from today’ssales data was that auto sales were reportedas being up by 1.7% during September. If you take away food, autos, and gas from the equation, sales during September were actually down by .1% while August’s figures were revised to show a .2% decline. Recently, economic data from the United States has been less than stellar, and we are seeing the global marketplace react as such.
Wrap-Up
To wrap things up, it is clear that we are in the middle of an important week of quarter and month-end economic data. As we look ahead to Thursday and Friday, that data is only going to continue streaming in, and most investors are not expecting much positive takeaways. Gold and silver, on the other hand, are loving what has happened through the first half of this week as interest in safe-haven precious metals is continuing to grow. Now we play the waiting game and see if gold and silver are able to finish the week as positively as they began it.
