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    JM Bullion Gold and Silver Market Update (11/14/16)

    Gold Spot Price Open: $1,229

    Gold Spot Price Close: $1,223

    Change in Gold Spot Price: -$6

    Silver Spot Price Open: $17.43

    Silver Spot Price Close: $16.92

    Change in Silver Spot Price: -$0.51

    Gold and silver fell to begin the week as a stronger Dollar, US stocks, and Treasury yields continue to prevent metals from moving forward. When all was said and done, gold fell by about 6 dollars while silver accrued losses of more than 50 cents. Platinum and palladium posted mixed results on Monday, with platinum losing close to 15 dollars while palladium managed to add more than 20.

    Metals Suffer Thanks to Economic Expectations

    As expected, the talk of the marketplace continued to be what impact president-elect Donald Trump might have on the US economy going forward. Right now, the expectation is that Trump’s policies will lead to more US spending, higher inflation, and ultimately higher interest rates. As you have probably learned through our extensive coverage of the interest rate situation in the United States, higher base rates is something that does not lend itself to gold and silver appreciating in value. In fact, higher interest rates are something that will continue to push metals downward.

    ActivTrades chief analyst spoke on factors affecting precious metals in a statement delivered on Monday. In that statement, he said, “Gold is suffering from an irrational dollar rally on expectations Trump’s fiscal policies will boost spending and therefore inflation, which could lead to higher U.S. interest rates. However, uncertainty about the U.S. economic outlook and also about international risk events such as the Austrian presidential election and the Italian constitutional referendum next month could have an impact on wider markets and impact gold’s trading in the medium term.”

    The USD Index on Monday surged to an 11-month high and is looking like it will continue to remain strong. So long as this continues to be the case, precious metals are going to have a difficult time moving forward. Even without the strong USD Index, metals would have a tough time moving forward mostly due to the fact that interest rates are still expected to be hiked come the December FOMC meeting.

    Bearish Outside Markets Not Helping Metals

    In addition to a stronger US Dollar weighing on metals, other outside market forces are keeping spot values subdued. Crude oil prices hit a 3.5 month low during the overnight hours and did not improve much at all during the day. Precious metals have recently been moving in sync with oil and so long as oversupply worries persist the spot value of crude oil is not going to move upward in any sort of hurry.

    As far as crude oil is concerned, the story hasn’t changed all that much. OPEC nations are continuing to overproduce on a daily basis and so long as this continues the spot value of crude oil is going to remain beaten down. Despite constantly reiterating the intent to cut daily production, OPEC has thus far made almost no effort to actually do that. As such, more oil is hitting the market than is currently being demanded and that is resulting in prices that are not moving much at all in an upward direction.

    Wrap-Up

    To be honest, this week is not looking like it will offer all that much in the way of markets-moving economic data. As such, I am expecting that the discussion regarding what a Donald Trump presidency means for economic and monetary policy will continue as it has for the past 5 or so trading days. At the end of the day, however, the marketplace is still expecting interest rates to be risen before the end of the year and so long as that remains the case the spot value of both gold and silver will be kept in check.

    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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