Posted on November 25, 2015
Gold Spot Price Open: $1,077
Gold Spot Price Close: $1,073
Change in Gold Spot Price: -$4
Silver Spot Price Open: $14.31
Silver Spot Price Close: $14.25
Change in Silver Spot Price: -$0.06
After making safe-haven gains on Tuesday, precious metals were seen once again backing down on Wednesday, just one day before markets become a good bit quieter. When all was said and done, gold lost a few dollars while silver managed to lose five cents. Platinum and palladium didn’t do much moving, but what movement was recorded was mostly in the downward direction.
Precious metals backed down again on Wednesday mostly thanks to a stronger US Dollar. This is not much of a surprise, but considering the Turkey/Russia situation it is interesting to see safe-haven demand dissipate so quickly. In case you missed it, yesterday’s top story was with regard to a Turkish F-16 fighter jet shooting down a Russian SU-24 bomber that had apparently strayed into Turkish airspace while on a bombing mission over Syria.
Making this situation particularly interesting is the fact that Russia is currently fighting in support of the Syrian government that Turkey is actively trying to dismantle. Most do not think this will become much more than a temporary and regional issue, and that much is being shown clearly in the retreat of precious metals spot values this morning. The safe-haven demand we saw yesterday is clearly not strong enough to overcome the belief that interest rates will be raised by the Fed before the end of the year. So long as that belief prevails, gold and silver will have a tough time making lasting gains forward.
Yesterday also brought about some US economic data that was far better than expected. Included in these reports was an upwardly revised 3rd-quarter report on US GDP as well as a report that indicated US home prices rose again recently. Both reports fell in favor of those who would like to see rates raised before the end of the year; something that basically seems like a shoe-in at this point.
Though it is only Wednesday, for many this is the last day of the week. In the United States the Thanksgiving Day holiday will be celebrated on Thursday and most Americans will take the remainder of the week to spend time with friends and family. Global trading will still go on as normal, but with US markets mostly out of the equation you can expect that trading activity will be mostly light and subdued.
The European Central Bank has recently been called into focus as they are apparently on the verge of instituting new monetary policies to hopefully further stimulate the struggling European economy. Just this week, the ECB was discussing making some major changes to the way the banking system(s) across Europe function. Unlike the United States, Europe has not really been able to pull itself back up to a level of economic growth that is expected from such a conglomerate of large countries.
For many, today might as well have been the last day of the week as a US holiday will more than likely make for quieter trading sessions now through the end of the week. What we do know right now, however, is that safe-haven demand is on the decline while risk-appetite is growing. I anticipate that this will remain the case so long as investors the world over are expecting to see interest rates raised before the dawn of 2016.