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    JM Bullion Gold and Silver Market Update (10/20/16)

    Gold Spot Price Open: $1,271

    Gold Spot Price Close: $1,269

    Change in Gold Spot Price: -$2

    Silver Spot Price Open: $17.71

    Silver Spot Price Close: $17.52

    Change in Silver Spot Price: -$0.19

    After what was, in truth, a fairly decent start to the week, metals dropped on Thursday thanks to some US economic data that handily defeated expectations. When the day came to a conclusion, gold was down about 2 dollars while silver’s losses edged in on 20 cents. Platinum and palladium dropped on the day as well, with platinum losing close to ten dollars while silver edged downward to the tune of only a few dollars.

    Existing Homes Data Pressures Metals

    After the first half of this week brought about little in the way of economic data from the US, it was not surprising that bullish outside market forces were helping prop up gold and silver spot values. On Thursday, however, the tide shifted a bit as some stronger US economic, specifically housing, data was made public.

    According to the National Association of Realtors, September saw a 3.2% uptick in the number of existing homes sold. This brings the seasonally-adjusted, annualized number of homes sold just shy of 5.5 million. This is almost 150,000 more homes sold than forecasts called for, and the data effectively ended any positive trek forward by metals.

    Perhaps helping precious metals, however, was another piece of data which showed a significant rise in the number of weekly jobless claims filed last week. In total, the number of first-time claims for unemployment benefits rose by 13,000 to bring the seasonally-adjusted average number of claims up to 260,000. Though this rise is fairly significant, it is important to note that we are still sitting well below the 300,000 seasonally-adjusted jobless claims—a very important threshold. This now marks 85 consecutive weeks where the seasonally-adjusted number of claims fell below 300,000. This is something that indicates a strong labor market.

    The expectation was for the seasonally-adjusted average to be at 250,000, so today’s data coming back higher than expected is something that might have helped gold and silver alleviate losses.

    Gold, Silver Benefit from ECB Meeting, Commentary

    Today, we received word that the European Central Bank is going to continue its asset-buying scheme for the time being. Similar to the Quantitative Easing we saw in the US for so many years, the nearly $1.5 billion in assets purchased monthly in Europe is aimed at devaluing the Euro and supporting economic growth.

    What’s more, interest rates across Europe are extremely low and looking like they will stay there. While low rates might typically benefit gold and silver, the fact that the euro has been beaten to a pulp is something that effectively cancels out any upside potential metals might have.

    Trump’s Performance Does Metals No Favors

    As we have discussed before, the presidential election is something that has massive implications for investors—specifically gold and silver investors. By extension, the debates preceding the election itself are also having an impact on the marketplace.

    For yet another time, Donald Trump was determined to be a loser when the 3rd and final debate came to a close. While this may not have necessarily hurt metals, it assuredly did not help. A Donald Trump election, which is now something that seems entirely unlikely, is something that would breed a lot of uncertainty and, as a result, metals would benefit. Being that Hillary Clinton appears to be a shoe-in for top spot in the Oval Office, investors are expecting business as usual. In other words, the more it seems like Clinton is going to win, the less concerned with the outcome of the election investors will become. Barring any massive changes from the current state of affairs, I would not expect to see metals react too much to the presidential campaign in the coming weeks. That is, of course, other than the reaction we get when the election actually takes place.


    All in all, Thursday was the busiest day of the week for investors so far. We did receive a good bit of news and data to talk about, but at the end of the day a lot of it offset such that metals did not finish entirely too far from where they started. Looking ahead to the final day of the week, it will be interesting to see if gold and silver can squeeze out some more forward progress, or if today’s losses turn into a 2-day affair.

    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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