Gold Spot Price Open: $1,179
Gold Spot Price Close: $1,149
Change in Gold Spot Price: -$30
Silver Spot Price Open: $16.42
Silver Spot Price Close: $15.66
Change in Silver Spot Price: -$0.76
Precious metals moved downward by considerable margins on Thursday thanks to investors reflecting on what the Fed had to say in their post-meeting statement. When all was said and done, gold lost about 30 dollars while silver was down by more than 75 cents. Platinum and palladium also lost on the day, but their losses were a bit more modest than that of gold and silver’s.
Gold, Silver Fall On Rate Hike Discussion
Precious metals took a massive hit on Thursday thanks to delayed reactions to the Fed’s post-meeting statement, which was delivered on Wednesday. Essentially, the Fed hinted yesterday that a December rate hike is not only still a possibility, but hinted that it is very likely to occur. More or less stating the obvious was Capital Economics Simona Gambarini when she said, “The consensus was for the first rate hike to occur in early 2016, so certainly yesterday’s statement was read as hawkish compared to expectations.”
As expected, the Federal Reserve left interest rates unchanged at their meeting this week. With that said, however, it was clear to see, or hear, that the tone of the Fed’s statement was such that interest rate hikes in December are definitely not out of the cards yet. Citing employment and inflation data as the two main driving factors behind whether rates are hiked or not, it is clear what investors will be focusing on not only throughout the rest of this month, but the early parts of November as well. Up until yesterday, the marketplace had more or less convinced itself that rate hikes were not going to come until early next year at the soonest. With the global economic slowdown we are currently witnessing threatening to slow down growth of the US and other major economies, it was easy to understand where the market was coming from. Now, however, the Fed’s recent remarks have investors rethinking their positions and perhaps preparing for a December rate hike. That much, of course, remains to be seen.
Stocks Slip on Growth Data
It wasn’t only precious metals that were suffering on Thursday, as stocks in both the US and around the world succumbed to data on Summer US economic growth not being as great as originally believed. Today proved to be especially poor for stocks thanks to some less than impresive 3rd-quarter earnings reports. Companies like Buffalo Wild Wings and GoPro both published earnings reports that fell far, far short of expectations, forcing the value of their respective stocks downward.
Stocks were further hurt on the day thanks to a Commerce Department statement that essentially said that end of Summer economic production in the US was not nearly as upbeat as originally anticipated. This was mostly due to a slow down in production and reduction of inventories. Despite all this, market experts and government officials continue to hold that the US economy is in good standing, especially compared to other economies across Europe and Asia.
Wrap-Up
When all was said and done, Thursday was clearly dominated by continued dissecting of the Fed’s Wednesday statement. As we head through the end of the month and into the beginning of November next week, all eyes will be on any and all economic data released in the United States. With employment and inflation being two of the biggest factors affecting interest rate hikes, investors will naturally keep a close eye on both those sectors of economic data.
