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    JM Bullion Gold and Silver Market Update (10/7/15)

    Gold Spot Price Open: $1,148

    Gold Spot Price Close: $1,148

    Change in Gold Spot Price: NO CHANGE

    Silver Spot Price Open: $15.95

    Silver Spot Price Close: $16.15

    Change in Silver Spot Price: +$0.23

    Precious metals gained again for most of the day Wednesday thanks to continued speculation regarding the US and its slow economic progress. When all was said and done, gold managed to remain just about unchanged while silver added another 20 cents to bring silver’s spot value up above $16/ounce. Platinum and palladium posted mixed results on Wednesday, with platinum gaining more than ten dollars while palladium close to $10.

    Trade Deficit in US Widens Considerably

    The likelihood that the Fed will increase rates this year took another hit today thanks to another poor economic report from the United States. Officially, today it was reported that the US trade deficit widened in August by the most in nearly half a year. The culprits behind the widening trade deficit are both a stronger Dollar and weakening economies overseas. In the official report, China’s slowing economy was given some responsibility for the slowdown we are currently seeing.

    The global economic slowdown that we have been witnessing over the past few weeks is a main reason behind why the International Monetary Fund slashed its outlook for global economic growth this year. Thanks to all of these developments, gold has managed to gain for three consecutive sessions through the first three days of this week. Now we are seeing a marketplace that is coming to terms with the fact that interest rates may not be risen this year. Fain Shaffer, President of Infinity Trading,commented today saying that “Gold seemed to really take off after that U.S. trade deficit number jumped in August, so definitely the trade data is giving it some legs today. There’s been a couple weak economic reports, and people are saying there’s maybe less likelihood of a rate increase in December.” Being that the Fed is expected to hold their monetary policy meeting for October in less than two weeks, speculation regarding rate hikes, or the lack thereof, is likely going to continue.

    How Far Can Metals Climb?

    After last week’s extremely disappointing figures on September job and wage growth, gold and silver have been seen making consistent, nice gains. With that said, this is not the first time we have seen gold and silver make gains after disappointing economic data. The difference between every other time gold and silver moved forward for a few consecutive days is that now investors have some solid evidence that supports their growing belief that rates may make it through another calendar year untouched. While it has long been debated whether the global economy is strong enough for the Fed to raise rates, now we are seeing the US economy’s strength called into question as well.

    The combination of a lack of foreign investment and a strengthening US Dollar are making it increasingly difficult for the US to continue growing. There needs to be a nice balance of global growth and growth here at home to support rate hikes, and we are not seeing either of those things right now. While the US economy is still performing well overall, the global economy continues to disappoint. So long as this remains true, it is hard to envision the Fed raising rates in October.

    Wrap-Up

    Looking ahead to the latter part of the week, you can expect the same conversations to persist. The number one topic remains US interest rates, and now investors are beginning to act on new-found beliefs that rates will not be raised this year. As we close out this week and head deeper into October, I do not envision the talk of the marketplace to stray too far from the future of interest rates in the US.

    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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