Posted on November 20, 2014
Gold Spot Price Open: $1,196
Gold Spot Price Close: $1,198
Change in Gold Spot Price: +$2
Silver Spot Price Open: $16.48
Silver Spot Price Close: $16.35
Change in Silver Spot Price: -$0.13
Precious metals ended the day mixed but not too far from where they opened on Thursday. When all was said and done, gold managed to gain just about two dollars while silver was down by more than ten cents. Platinum and palladium both finished the day up, but platinum made out the better of the two.
This week has not played host to too much in the way of markets-moving economic data, but that changed a bit through the afternoon hours of today. A healthy number of economic reports were made public this afternoon, including the weekly jobless claims data, US flash manufacturing PMI, consumer price index, as well as data on existing home sales.
After picking apart the reports, it was uncovered that factory activity in the Mid-Atlantic United States is growing at rates we have not seen in more than twenty years. Adding to the upbeat reports was the existing homes data that showed resales of homes being at their highest point in more than a year in October. Finally, wrapping things up was an upbeat outlook on the future of US economic activity.
All in all, today’s data helped give stocks a boost and did a lot in the way of diminishing the safe-haven interest in precious metals. It seems as though every time gold and silver begin to go on a bit of a rally, something pops up to diminish the buying interest associated with metals.
In overnight news, China’s October manufacturing PMI reading was made public and was seen to have declined from September to October. In October, the PMI reading was a solid 50, but this mark was slightly down from September’s reading of 50.4. While any reading 50 or above indicates that the economy in question is growing, China is slowly but surely flirting with danger with readings dropping so consistently.
This relates to gold and silver because, as the world’s largest importer of precious metals, downbeat economic data from China will only work to further diminish buying interest. Just as crude oil brings down all raw commodities, so too does poor economic data from China.
Though this should not be a surprise at all, today played host to more downbeat economic data from the European Union. The Markit research group reported that the EU’s composite PMI came in at 51.4 in November, down from a reading of over 52 in October. In addition to the poor PMI reading, the Markit survey also displayed a batch of EU manufacturers who are not exactly convinced that economic conditions in Europe will get better anytime soon.
Today’s poor EU economic data put a lot of pressure on European stocks and might very well have added even more pressure on the European Central Bank to consider making further shifts in monetary policy. Just a few days ago, ECB president Mario Draghi spoke to members of the media and alluded that the EU’s central bank might begin purchasing government bonds and, thus, be pursuing quantitative easing measures very similar to those that were just done away with in the US last month. It is still unclear how things will unfold in Europe, but we do know that we are in for an eventful next few weeks with the next ECB meeting being just right around the corner.
Today brought about a plethora of economic data for investors to mull over, but none of the data had any massive impact on the global marketplace. As we head into the final day of the week, I expect to see further delayed reaction to today’s upbeat US economic data as well as further speculation with regard to what will be happening to EU monetary policy in the near future. With the ECB meeting set to be held within a week or two, you can bet that there will be a whole lot of speculation going on.