Gold Spot Price Open: $1,175
Gold Spot Price Close: $1,179
Change in Gold Spot Price: +$4
Silver Spot Price Open: $15.93
Silver Spot Price Close: $16.00
Change in Silver Spot Price: +$0.07
Precious metals were able to regain some of Monday’s losses on Tuesday thanks to some stronger economic data and a few other factors. When all was said and done, gold managed to add roughly 4 dollars while silver’s gains were kept just below 10 cents. By day’s end, platinum ended up just about in the same position it was in when the day began, but palladium managed to gain more than ten dollars.
China’s Struggles Reflect Upon US Growth Expectations
If we rewind the clock just a month or two, the prevailing belief was that even though other global economies were slowing down, higher wages, cheaper fuel, and a general sense of optimism was going to be enough to keep the US economy trucking forward. Cut to today, and the sentiment held by most investors could not be any more to the contrary. It isn’t only China that is hurting US economic growth expectations, because Brazil, Canada, and many EU countries are struggling as well. In fact, Canada is currently experiencing very real elements of a recession.
In recent weeks, we have seen that even with lower fuel prices giving homes more expendable income, Americans simply aren’t spending. What’s more, hiring has slowed to a near halt and home sales are beginning to flatten out. All in all, US citizens and investors are becoming just a bit more wary of what is going on overseas. For gold and silver, this slow but steady change in sentiment is something that is helping spot values improve at a moderate, yet noticeable rate. If you take a look at performance, the spot values of both gold and silver display a clear uptrend from the beginning of September to today. Prior to September, metals were flirting with multi-year lows and were flat-out the victims of the widespread belief that interest rates were going to be raised in the immediate future. Now that we know interest rates may remain put for the duration of the year, it will be interesting to see if metals can continue to climb or if caution will creep in and things will flatten out.
The Federal Open Market Committee of the Federal Reserve is scheduled to hold their October meeting a week from now, and that much is sure to have some sort of impact on the metals market. For now, it is widely believed that the Fed is not going to offer too much in the way of fresh information regarding interest rate hikes, though that much remains to be seen.
Housing Starts Uptick In September
Quite contrary to some of the above, the Commerce Department today published a report that showed an unexpected increase in housing starts last month. On an annualized basis, housing starts in September were up by more than 6%, which is far greater an increase than anyone had expected.
This data, of course, lends a tiny bit of credence to the belief that interest rates may be hiked in or before December. For this reason and many more, there is going to be a great bit of emphasis placed upon next week’s FOMC meeting and any related statements from the Fed and its members.
Wrap-Up
Tuesday was yet another uneventful day for most of the world. As has been the case for quite some time, investors are obsessed with data from China and the United States while most other nations and their news stories remain mostly on the back-burner. Moving through to the end of the week, the weekly jobless claims report will be called into focus and picked apart by investors as it always is.