Gold Spot Price Open: $1,272
Gold Spot Price Close: $1,278
Change in Gold Spot Price: +$6
Silver Spot Price Open: $17.70
Silver Spot Price Close: $17.75
Change in Silver Spot Price: +$0.05
Even though this final day of the week emitted what many are calling a surprise piece of economic data, the precious metals market was able to withstand it and mostly hold their ground Friday. When all was said and done, gold ended up moving up by about 6 dollars while silver ended with gains of about 5 cents. Platinum and palladium both gained on the day, but platinum was the bigger winner with gains of nearly 15 dollars while palladium posted more modest advances of about 4 or 5 dollars.
US GDP Data Makes a Splash
All week long we were dealt economic report after economic report. While most of them caught the attention of investors in the US and elsewhere around the world, everyone was really focused on Friday and the Q3 GDP report that was expected to be dealt. During the mid-morning, the report was finally released and investors and market experts alike were a little surprised with regard to what they saw.
Officially, the US economy grew by 2.9% during the 3rd quarter. This not only bested expectations that called for barely over 2% growth, it does well to cast a shadow on the first half of the year and the slow growth experienced during that time. Through the first 6 months of 2016, the US economy grew by less than 2%. Not only did this do well to have many people thinking interest rate hikes would not take place this year, it also cast doubt upon the growth expectations for the year as a whole. Now, with Q3’s robust and overly positive report, investors have grown just a bit more confident that December will finally see rates hiked again.
A big driver behind the upbeat GDP data was consumer spending. During the third quarter, consumer spending improved by 2.1% from the quarter preceding it, indicating that consumers are feeling more comfortable about their personal financial situations and, as a result, are out spending money.
TD Securities published a short note that more or less summarized what today’s data really means. In that note, TD said, “Confirmation of above-trend growth reinforces the economy’s momentum in the third quarter, as already supported by strengthening labor market conditions. Today’s data on economic growth conditions and wage trends keep the Fed’s tightening bias intact, with a December meeting the most likely time for the next step in rate normalization.” To make a long story short, TD Securities, among many other companies and individuals, are becoming wholly convinced that rate hikes are going to come in December. Even despite all of this, gold and silver spot values managed to finish the week on a somewhat positive note. After seeing such strong growth during the 3rd quarter, it is surprising to many to see spot values still holding their ground.
If you look at this week as a whole, the overall tone of the data made public by the United States has been positive. We received word of a strong housing market, weekly jobless claims fell once again, and now we found out that the US economy is growing at a faster than expected rate. When it comes down to it, there is a large contingent of folks who will be absolutely shocked if the Fed does not finally pull the trigger on rate hikes come roughly 2 months from now.
Wrap-Up
Even though gold and silver spot values were able to mostly withstand the Q3 GDP data from the US which was released on Friday, there are not many who are expecting metals to have an overly positive week next week. Of course, bargain-hunting will help keep spot values in check, but as the likelihood of a December rate hike continues to grow so too will the pressure facing metals.