Posted on November 18, 2015
Gold Spot Price Open: $1,072
Gold Spot Price Close: $1,070
Change in Gold Spot Price: -$2
Silver Spot Price Open: $14.31
Silver Spot Price Close: $14.27
Change in Silver Spot Price: -$0.04
Precious metals fell again on Wednesday on a relatively lackluster day across the global marketplace. When all was said and done, gold lost about two dollars while silver fell by only a few cents. Platinum and palladium both fell on the day by about ten dollars.
A somewhat downbeat piece of economic data was reported on Wednesday as October housing starts fell by more than 10%. Housing starts in October were adjusted to an annual rate of 1.06 million. This data fell short of expectations that called for between 1.15 and 1.17 million housing starts. Year on year housing starts for October fell by nearly 2%.
While this poor housing data might normally be enough to shake expectations for a rising of interest rates in December, the fact that permit applications are on the rise gives investors confidence that the housing market will remain strong. For the Federal Reserve, the strength of the US housing market has long been one of the biggest factors affecting whether rates will be raised or not. In recent history, housing data has been on the positive side of things as US citizens have more money to spend and generally feel more confident in their financial status.
After the attacks in Paris over the past weekend, conventional thought would have led people to believe that safe-haven demand would drive gold and silver spot values upward. What has actually taken place is that spot values aren’t really moving much at all. For now, gold is looking like it will trade between the $1,040 and $1,070 range.
As surprising as it may sound, gold has outperformed most other commodities this year, which gives investors cause for concern. The reason for this is that gold may be due to move even further downward. If this is the case, other precious metals may follow suit.
If the price of gold and silver continues to fall, the mines that produce the metals will suffer even more than they have in recent years. If spot values fall as drastically as some think they still might, some miners may be out of work. An analyst from JP Morgan, John Bridges, commented on the situation by saying, “The miners must also be thinking about replacing their reserves, and if gold were to fall further, the process could prove challenging for the unprepared. Already some are talking about the risk of a ‘gold cliff’ or peak gold supply.”
Looking ahead, there is no saying what direction gold and silver are headed. For now, however, it is looking like metals will have a hard time doing anything other than decline. The surging US Dollar and equities that are also performing well, there isn’t much room for metals to move forward. What it boils down to is what the Fed does or doesn’t do before the end of the year, and until that day comes the speculation will only continue.
As we look ahead to the last few days of the week, there really isn’t much to look forward to. The weekly jobless claims report is due out tomorrow, and apart from that investors will continue closely analyzing any bits of data emerging from the US, China, and Europe. It is highly unlikely that gold and silver spot values will rebound before week’s end, but with that said, crazier things have happened.