Posted on November 18, 2014
Gold Spot Price Open: $1,185
Gold Spot Price Close: $1,196
Change in Gold Spot Price: +$11
Silver Spot Price Open: $16.13
Silver Spot Price Close: $16.26
Change in Silver Spot Price: +$0.13
Gold and silver began the day adding value and didn’t really look back. When all was said and done, gold was able to gain more than ten dollars while silver’s gains came closer to 15 cents. Platinum and palladium finished the day moving upward, both by little more than 5 dollars.
In case you missed it, European Central Bank president Mario Draghi was quoted as talking about the future of monetary policy for the European Union on Monday. In his remarks, he alluded to the fact that the ECB very well may institute further accommodative monetary policies, such as the purchase of government bonds (quantitative easing). Though this was not exactly groundbreaking news, it caused many investors to think that the ECB is more than eager to take further decisive action in order to get the overall EU economy on track. In the wake of Draghi’s remarks, European equities improved dramatically.
Today, there was more news from Europe, this time in the form of the most recent German ZEW economic expectations index. Even though the German economy is seen as one of the best in Europe, it too has been experiencing its fair share of difficult in recent weeks. Today, however, the economic expectations index came back far better than expected and suggested that perhaps the German economy is not in such dire shape after all.
Despite the fact that the ZEW economic expectations index is not the most highly scrutinized economic report, it was still encouraging to see such a positive economic reading stem from such a downbeat economic region.
The US Dollar, which has been closely watched and analyzed recently, fell today against most rival currencies. The greenback is still in a fine position, but suffered a bit of a pullback today as most investors await tomorrow’s release of the minutes from the FOMC’s most recent meeting.
There are other economic reports due out of the United States today, including the producer price inflation data from October as well as housing data for November. As of now, expectations are that producer prices in October will have risen by about 1.2%, as opposed to the 1.6% increase seen during September. All eyes will be on this data as there are not many other pieces of economic data to pay attention to and even fewer that have the pull to possibly influence the movement of the US Dollar.
Due to an overall lack of markets-moving economic and geopolitical developments, the marketplace has no choice but to focus on reports and data that would otherwise be ignored. Throughout the early morning hours and for much of the trading day, rumors were circulating with regard to the European Central Bank possibly being interested in purchasing gold and silver as a method of countering low inflation.
What’s more, Russia too has come out and said that it is planning on bulking up its precious metals reserves as well.
The rumors with regard to central banks possibly bulking up their precious metals holdings are doing well to increase the buying interest associated with gold and silver and are lifting spot values today. It will be interesting to see if the boost derived from today’s rumors will result in sustained gains or if things will tick back downward upon quiet dealings tomorrow.
As we leave this day behind us and look ahead to tomorrow, the number one thing on the minds of investors will be the release of the FOMC minutes tomorrow. Though the Fed has reiterated that it plans on keeping interest rates at present levels for the foreseeable future, investors will still want to pick apart tomorrow’s minutes for any clues that can at all be related to future monetary policy shifts.
Other than tomorrow’s minutes, you will see investors continue to focus on global currency and equity markets.