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    JM Bullion Gold and Silver Market Update (10/19/16)

    Gold Spot Price Open: $1,264

    Gold Spot Price Close: $1,271

    Change in Gold Spot Price: +$7

    Silver Spot Price Open: $17.67

    Silver Spot Price Close: $17.65

    Change in Silver Spot Price: -$0.04

    Precious metals continued to benefit from bullish outside markets on Wednesday and continued what has quickly become a somewhat positive week. When all was said and done, gold picked up about 7 dollars while silver actually ended up losing about 2 cents. Platinum and palladium both finished the day in almost the same exact position they were in when it began.

    Upbeat Chinese Data Comes to Metals’ Aid

    Both gold and silver performed half-decently yet again on Wednesday with gold managing to finish the day right around a 2-week high. Though silver ended up losing on the day, losses were kept to minimum thanks to Chinese economic data as well as crude oil prices that continue to edge higher.
    It has been a while since we have really discussed any Chinese economic data, so it is only right that we explain why good news from China is typically good for precious metals. The explanation is quite simple actually, and it is that China is the top importer of commodities in the world. So when the Chinese economy is doing well, the assumption is that massive quantities of precious metals are either being purchased or ultimately going to be purchased as a result. Of course it is, in reality, a bit more complex than that, but that is the simplistic long and short of it all.

    Today’s data showed that the Chinese economy grew by 6.7% on an annualized basis in the 3rd quarter of this year. While that may seem like absolutely massive growth, it was just about in line with expectations. What’s more, the 6.7% growth realized last quarter matched the growth experienced in Q2 of this year. Chinese retail sales in September improved by more than 10% year over year and this was also more or less in line with what experts were anticipating. Despite industrial production data missing the mark slightly, the batch of Chinese data received today was determined to be positive overall. For gold and silver this is great news because the Chinese economy has struggled to emit consistent data for quite some time now. If this kind of performance continues and spot values are being actively beaten down by interest rate hike expectations in the US, physical demand from places like China and Hong Kong might be able to offset a bit of that downward pull.

    Mixed Housing Data Aids Metals

    Recently, we have seen that with every upbeat piece of US economic data the spot values of gold and silver suffer. That was not the case today as some mixed housing data was made public by the Census Bureau as well as the Department of Housing and Urban Development.

    According to the 2 organizations, the number of housing starts seen in September fell by almost 10% when compared to August. Officially, the seasonally-adjusted number of housing starts fell to 1,047,000 compared to the 1,150,000 we saw a month earlier. While this news might suggest that the housing market is in trouble, there are not too many people buying into this school of thought thanks to a report that was released shortly thereafter. The report in question showed that the seasonally-adjusted number of building permits in September rose to 1,225,000 from about 1,150,000 recorded in August. So while this past month may not have seen a lot of ground broken for the construction of new homes, the coming months are looking like they will.

    Wrap-Up

    All things considered, the upbeat Chinese data was enough to keep precious metals from succumbing to the continued discussion surrounding rate hikes. The US housing data being mixed ended up having little impact on metals’ spot values, and in the current market that is a very good thing for metals investors. With two days to go, this is looking like a positive week for metals, however many things can change over the course of Thursday and Friday.

    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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