Gold Spot Price Open: $1,166
Gold Spot Price Close: $1,165
Change in Gold Spot Price: -$1
Silver Spot Price Open: $15.90
Silver Spot Price Close: $15.94
Change in Silver Spot Price: +$0.04
Precious metals did not do much moving today, though there was plenty to talk about across the global marketplace. When all was said and done, gold finished the day exactly where it started it while silver improved by a few pennies. Platinum and palladium moved downward to begin the week, but neither metal’s losses extended beyond 10 dollars.
Dollar Drops Dramatically on Data Miss
After closing out last week in somewhat impressive fashion, the greenback’s recent volatility returned today thanks to some less than impressive economic data from the United States. Though beginning the week around a 2.5 month high, the Dollar quickly fell from that post thanks to lower US bond yields and housing data that fell short of expectations. The poor data comes at a very unfortunate time too, as investors gear up for this week’s meeting of the Federal Open Market Committee of the Federal Reserve—expected to kick off on Tuesday.
Also forcing the Dollar lower were sub-par crude oil prices as well as major stock markets that just cannot seem to gain any solid footing. As it stands, many who are hoping to see US economic growth pick back up are not necessarily disappointed in the greenback’s recent faltering. This is so because the current economic slowdown we are witnessing, combined with a stronger US Dollar is making US growth lag a bit. We are now seeing that come to a head thanks to a fairly consistent batch of poor recent economic data.
According to the US government, sales of new homes in September were the worst we have seen in almost a full 12 months. Despite July and August showing impressive new home sales figures, year on year analysis shows that September’s figures fell by more than 11%. This is a particularly bad batch of data as even the worst predictions did not touch an 11% drop. Now, as attention shifts to the Fed and their meeting this week, the marketplace is becoming increasingly pessimistic with regard to the potential for interest rate hikes this calendar year. As one currency strategist put it today, “They may keep the door open for a hike in December, but even that’s unlikely.”
Oil Continues to Slide on Weak Global Demand
The price of a barrel of crude oil hit near 6-week lows on Monday as traders fretted over both an ongoing supply glut as well as the possibility of a global economic slowdown threatening demand. Not helping the price of oil at all was China’s decision last week to slash lending and deposit rates. According to CMC Markets chief market strategist Colin Cieszynski, recent rate cuts “along with reports over the weekend that China may be backing away from 7% growth target, have spooked some traders into wondering just how badly China’s economy is struggling and how much its troubles could impact demand for resources.”
The declining price of oil has been a hot-topic issue since last summer, but more recently we are seeing how the slowdown in demand is negatively affecting oil-producing companies. Still, one cannot deny that filling up the gas tank has been a bit more feasible over the past year, and that much is keeping consumers at the pump very happy. As oil companies continue to lay off workers, reduce their capital expenditures, and otherwise tailor their business strategy to a world that is demanding less and less oil, it will be interesting to see why kind of impact this has on the overall global economy.
Wrap-Up
While today did offer a good bit of economic data, very little of it had any major impact on the price of gold and silver. With regard to the grand scheme of things, this week will see investors focus much of their attention to the FOMC meeting and any bits of information that can be extracted from it. As it stands, however, very few people are expecting a deluge of fresh information to be offered up in the wake of this meeting.
