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    JM Bullion Gold and Silver Market Update (10/20/14)

    Gold Spot Price Open: $1,240

    Gold Spot Price Close: $1,247

    Change in Gold Spot Price: +$7

    Silver Spot Price Open: $17.36

    Silver Spot Price Close: $17.48

    Change in Silver Spot Price: +$0.12

    After closing out last week having posted marginal daily losses, gold and silver were able to bounce back and improve upon their constantly improving technical postures today. When all was said and done, gold gained around 7 dollars while silver improved by little more than ten cents. Platinum and palladium both also finished the day on the up and up, each gaining around ten dollars.

    Bargain-Hunting, Safe-Haven Demand Helping Spur Metals’ Gains

    Today played host to a mostly quiet market atmosphere both in the US and around the world, but that did not stop gold and silver from improving upon their positions. Now sitting near a 5-week high, the spot value of gold only seems to have been improving over the course of the past two or more weeks. Recent volatility on the part of US and world equity markets as well as the general uncertainty surrounding many global economies are two factors that have really aided metals in recent history.

    As you are probably well aware, anytime investors are scared or uncertain, safer assets such as precious metals almost always seem to benefit. That, currently, is exactly what is happening across much of the world and is translating into a slew of investors who seem to be preliminarily cutting their losses in search of calmer pastures in the precious metals and US Treasuries markets. As this week picks up speed and things begin to develop further, it will be interesting to see if metals will be able to maintain or even build upon recent gains, or if things will back down much like they did towards the end of last week.

    Crucial Labor Market Information Playing Into Fed’s Rate Decision Heavily

    Only about a month ago, there were plenty of investors who were under the impression that Federal Reserve-led interest rate hikes were only a short time away. Now, however, that attitude has almost entirely shifted and most would be surprised to see such hikes within the next 11-12 months. A major contributing factor to the Fed’s reluctance to increase interest rates is a labor market statistic that most Fed policy makers are simply ignoring; and that is information regarding whether those who are currently employed are overqualified for their job or not.

    Being described as the “underutilization of labor resources”, the current employment situation in the United States, though improving, may not be as upbeat as the raw data leads us to believe. While there are many new jobs being added to the economy, and the unemployment rate continues to shrink, this data alone may not be enough for Fed officials to make any rate changes anytime soon. According to Michelle Meyer, US economist for Bank of America, “We have more slack than the official statistics suggest. Because it’s difficult to measure underutilization, there’s still a lot of uncertainty as to how much slack remains, which means there’s uncertainty as to the appropriate stance of monetary policy.” Many people have been wondering why, amid such a positive period of economic growth in the US, the Federal Reserve is still hesitant to make any major shifts in policy. With this bit of uncertainty in mind, the Fed’s reluctance seems to make a bit more sense.


    In general, the level of economic activity is expected to pick up as the week move forward, but today was particularly quiet and subdued. The USD Index and most major US equity indexes traded downward today, though considering gold and silver’s progress, this should come as no surprise. There isn’t a whole lot of economic data expected to be made public this week, but you can bet that whatever data is made public will be hawked over by investors from around the world.

    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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