Posted on November 10, 2015
Gold Spot Price Open: $1,092
Gold Spot Price Close: $1,091
Change in Gold Spot Price: -$1
Silver Spot Price Open: $14.54
Silver Spot Price Close: $14.52
Change in Silver Spot Price: -$0.02
As expected, both gold and silver continued to move downward on Tuesday thanks to a general lack of support across the global marketplace. When all was said and done, gold lost another dollar while silver’s losses were somewhere in the neighborhood of 2 cents. Platinum lost more than ten dollars on the day, though palladium did not move at all by the time the day was over.
I hate to sound like a broken record, but the fact of the matter is that not much has changed across the global marketplace throughout the first few days of this week. The tone of investors is such that December rate hikes are slowly but surely being taken into consideration by investors. With that said, however, there is still a large segment of the global economic marketplace that is not taking rate hikes as being granted.
Thanks to the fact that there is still some doubts with regard to whether interest rates will be hiked or not, gold and silver still have plenty of room to move downward. Right now, gold is hovering around a 3-month low and is sitting below a key psychologic threshold, at under $1,100/ounce. Now, all eyes are on the $1,077/ounce price point as it would be bad news if gold moved too much lower than that. Commenting on this today was, Jonathan Butler, a strategist from Mitsubishi, who said, “It’s very possible we are going to see a breach of the $1,077 support… particularly if the ECB starts to expand their quantitative easing program in December, then we may see some further strength in the dollar.”
Ever since last week brought about the newest and strongest commentary on the potential for hiked interest rates, the US Dollar has been performing extremely well against rival currencies. Today especially, the Dollar made nice strides forward, especially against the Euro.
As was mentioned above, there is a strong contingent of investors who believe that the European Central Bank will move to expand its current quantitative easing program before the end of the year. If this move is made, the Euro will suffer and will, in turn, give the Dollar even more room to venture forward. Of course, this is nothing but more bad news for gold, silver, and most all other precious metals.
For many, the European Central Bank has no choice but to expand quantitative easing measures, as the threat of a global economic slowdown lingers on the mind of every European-minded investor. As the US did for so many years, the Eurozone is currently pursuing economic stimulus measures aimed at devaluing the Euro and hopefully, in turn, spurring economic growth. In many respects, the US did this successfully and that is likely why the ECB pursued similar tactics. Critics, on the other hand, do not believe that quantitative easing measures are the correct route to combat slowing growth across many European economies. Only time will tell what is going to happen to European economic policy, but it looks as though more QE is just around the corner.
Looking ahead to Wednesday and the rest of the week, I do not expect the tone of the marketplace to shift all that far from where it has been the last few days. Many are hoping that precious metals will be able to halt their current slides, but there is no guarantee as far as that is concerned. Right now it is more of a psychological battle than anything else, and it is one that the gold bulls are taking on the chin.