Posted on November 20, 2015
Gold Spot Price Open: $1,082
Gold Spot Price Close: $1,080
Change in Gold Spot Price: +$5
Silver Spot Price Open: $14.35
Silver Spot Price Close: $14.22
Change in Silver Spot Price: -$0.13
Precious metals bounced back on the last day of the week to somewhat make up for a week of losses. When all was said and done, gold lost a few dollars while silver lost about 13 cents. Platinum and palladium posted mixed results but neither metal moved too far from where they opened up.
Precious metals spot values rebounded a bit on Friday after many days of declines, but still finished the day in the red. Many market experts agree that gold and silver have hit their bottoms and may finally be evening out. On the bright side, gold and silver spot values may not fall too much further, but there isn’t much happening across the global marketplace that would suggest gains are going to take place anytime soon though.
According to Mitsubishi analyst Jonathan Butler, “What we’re seeing now is a bit of short covering, moving on from the fact of a rate rise in December and questioning what the path is to tightening rates in 2016. We’re down towards the bottom end of the trading channel we’ve seen in the year to date, and it was in oversold territory very recently. We seem to have bounced off the lows for now.”
Something that is partially helping gold and silver as it related to rate hikes is the fact that most market experts do not think rates will be hiked too dramatically the first go around. As was discussed before, the Fed plans on gradually raising rates similar to how they gradually reduced Quantitative Easing measures when that was phased out. All in all, it will be truly interesting to see what happens between now and the end of the year.
St. Louis Federal Reserve chairperson spoke about how the Fed will continue to gradually raise interest rates after an initial hike. Basically, Bullard is saying that the Fed will assess further rate hikes on a meeting-by-meeting basis. What this does for investors, however, is more or less confirm that rates will be hiked before the end of the year.
In his statement, he said, “I think we are going to return to an era where there is a bit more uncertainty about what the (Fed’s policy-setting) committee is going to do meeting to meeting. I would welcome the return of that because to me that’s normal monetary policy.”
What we can take away from this is that December rate hikes are set in stone, or at least this is how the investing world is looking at it. This is not good news for gold and silver, and will be even worse if investors have not completely factored in rate hikes to their current investing decisions.
Looking ahead to next week, it will be interesting to see what direction the market heads. Gold and silver have rebounded a bit to close out the week, but it is hard to envision that these corrective bounces are anything other than temporary. With more Fed commentary expected next week, investors will be all ears in order to find out any more information about lifting rates. It is tough to say for certain what the next few weeks will hold, but they will be incredibly vital for investors who have a lot to take into consideration before the end of this calendar year.