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    JM Bullion Gold and Silver Market Update (10/17/16)

    Gold Spot Price Open: $1,253

    Gold Spot Price Close: $1,258

    Change in Gold Spot Price: +$5

    Silver Spot Price Open: $17.46

    Silver Spot Price Close: $17.44

    Change in Silver Spot Price: -$0.02

    Precious metals are beginning the week with a few signs of life, but with little having changed around the global marketplace there are few people expecting anything in the way of large, sustained gains. When all was said and done on Monday, gold managed to tack on around 5 dollars while silver ended up losing a few pennies. Platinum and palladium finished the day mixed, but neither metal ended up too far from where it began the day.

    Physical Demand Pushes Spot Values Higher

    Last week marked the return of many Asian traders from a holiday week, and with that came a noticeable increase in the demand for physical gold and silver from places like China and Hong Kong. Even though last week saw this physical demand do much more in the way of limiting losses than it did contribute to gains, some experts believe that strong demand from Asia will help metals move higher this week.

    What’s more, with the upcoming ECB meeting expected to at least touch upon the possibility of more economic stimulus across Europe, metals may receive even more of a boost.

    While this is so, a stronger US Dollar will likely do a great job of limiting any of the gains made thanks to demand from Asia or more stimulus across Europe. Recently the greenback has been performing quite well, though it did happen to cool off at the end of last week. That cooling off continued into today as the USD Index—which measures the Dollar against a basket of rival currencies—moved downward yet again. At this point, precious metals are going to take whatever they can, and today can be mostly chalked up as a win. Unfortunately, so long as interest rate hikes in the US remain on the table, which they very much are currently, metals will only ever be able venture so far. Gold is having trouble edging above $1,260/ounce while silver is having a tough time staying above $17.50/ounce. This week may not be loaded with economic data, but it will still be very important nonetheless.

    Fed’ Fischer Advocates Against Low Rates

    The Vice Chair of the Federal Reserve, Stanley Fischer, was quoted on Monday pointing out the dangers of keeping rates too low for too long. Fischer was speaking at the Economic Club of New York on Monday, and made it clear that leaving rates too low means the economy is at risk of not only falling into recession, but falling into a recession that is far deeper and more sustained than we have ever seen before.

    With all of this being said, Fischer did not comment directly on what he wants to see done to monetary policy now or in the future. Despite this, the marketplace was perceiving his comments as support for the perceived December rate hike that so many are expecting. 3 voting members of the FOMC were seen in September calling for rates to be hiked, and so long as the data continues to improve and remain solid, so too will the chances for a December rate hike.

    Wrap-Up

    Other than Fisher’s comments on Monday, there was very little in the way of fresh news for investors to talk about. We will be paying close attention to new inputs expected by midweek and continuing through to the end of the week, but beyond that the eyes and ears of the market will be placed firmly on any and everything relating to the US economy, its strength, and what the future might hold.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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