Posted on November 23, 2015
Gold Spot Price Open: $1,077
Gold Spot Price Close: $1,067
Change in Gold Spot Price: -$10
Silver Spot Price Open: $14.40
Silver Spot Price Close: $14.21
Change in Silver Spot Price: -$0.19
Precious metals are moving downward to begin the week as the same conditions continue to remain stacked up against the forward progress of gold and silver. When all was said and done, gold lost about ten dollars while silver’s losses were closer to 20 cents. Platinum and palladium also fell on the day, but palladium was the bigger loser of the two by declining by 20 dollars.
In the past, events like war, elections, and other major geopolitical events have been heavy influences in the directional movement of spot values. More recently, however, such has not been the case, as highlighted by a letter published by the RBC. According to the RBC report, “We can see that while gold appears to have been a safe haven historically, moving higher after these geopolitical shocks, this seems to have broken down as the gold price has not been affected by events in recent years.”
Citing the 1970s Soviet invasion of Afghanistan, where the price of gold ticked up by more than 20%, the RBC noted that recent events like the fighting in Ukraine and Greek debt crisis have failed to move spot values all that much. While these events have brought about temporary shifts in spot values, the fact of the matter is that these events have not had any lasting impact on gold and silver spot values.
The story has not really changed to begin this week as the marketplace is keeping a close eye on the price action of the US Dollar. Surging even higher today was the greenback, which made gains in the face of rival currencies as well as commodities.
Surprisingly, today saw European stocks slump even though reported data came back far better than expected. The fact that the Dollar is on an absolute tear recently, coupled with the fact that commodities cannot seem to gain any sort of lasting foothold are both part of the reason behind why European stocks are doing so poorly. Wall Street didn’t have a day to write home about either on Monday.
As we look further into this week, some manufacturing and housing market data will be dealt and it will definitely have some sort of impact on the interest rate discussion. For now, precious metals have been doomed by upbeat US economic data and a perceived increased likelihood that rates will be hiked before the end of the year. As we have been saying for the past few weeks, it is unlikely that any of this will change as the Fed’s recent commentary has all but guaranteed a December rate hike. Apart from the aforementioned economic data, this week is not expected to be very busy, which means we will likely continue to hear of interest rate speculation and anything that may influence whether or not rates are hiked next month.
As we wrap up the first day of the trading week, it is clear to see that not much of anything has changed. The market is still very much concerned with when interest rates will be hiked, and as such are focusing on just about every piece of US economic data that is made public. Gold and silver spot values are still trending downward and it is hard for me to envision any scenario in the near future where this is not going to be the case.