Gold Spot Price Open: $1,343
Gold Spot Price Close: $1,332
Change in Gold Spot Price: -$11
Silver Spot Price Open: $22.82
Silver Spot Price Close: $22.57
Change in Silver Spot Price: -$0.25
Gold and silver both suffered moderate losses on Wednesday as market experts are citing a technical correction after yesterday’s massive gains. When all was said and done, gold lost about 11 dollars while silver dropped a quarter of a dollar.
As delayed US economic data continues to make its way out to the public, other stories are catching the attention of investors. In China, rising short-term interest rates have caused investors to be more skittish in regards to stock market investments in both Asia and Europe. If interest rates continue to rise, the Chinese government may need to tighten their monetary policy. This, in essence, is why investors are beginning to pay attention to the economic situation in China.
It is believed that if China were to tighten its monetary policy, demand for precious metals out of China would decline dramatically. Seeing as China is the second largest economy in the world, and an especially large consumer of precious metals, a decline in their demand for gold and silver would likely hurt spot values. For this reason we will continue to monitor China in an effort to determine how their government will handle the rising interest rate problem, if they do anything at all.
More investors are beginning to realize that the Fed’s chances of reducing Quantitative Easing before the year’s end are diminishing rapidly. While it was once thought that QE would see some sort of reduction before the turn of the new year, it is now a more accepted belief that monetary policy in the US will remain unchanged until at least sometime in the first quarter of 2014. The continuation of the Fed pumping billions of dollars into the economy each month is an underlying positive factor for precious metals that is going to be in place for some time, or so it seems.
