Posted on November 28, 2014
Gold Spot Price Open: $1,192
Gold Spot Price Close: $1,168
Change in Gold Spot Price: -$24
Silver Spot Price Open: $16.30
Silver Spot Price Close: $15.52
Change in Silver Spot Price: -$0.78
Precious metals were dealt a serious blow to close out the week on Friday, thanks, in part, to an uneventful OPEC meeting on Thursday. When all was said and done, gold was down by more than 20 dollars while silver declined by more than 3/4’s of a dollar. Platinum and palladium finished the day mixed, with platinum sharply down while palladium managed to pick up a few dollars.
While many of you were enjoying a festive holiday meal yesterday, the rest of the world was pouring over the results of the latest OPEC meeting. On Thursday, members of the world’s largest oil cartel met to discuss why crude oil prices have been on the decline as well as what they plan on doing in order to prevent those prices from continuing to fall. In the lead-up to yesterday’s meeting, most people expected that OPEC would either lower daily oil production quotas or, if nothing else, more closely monitor those quotas.
By the time the meeting was through, however, OPEC did not make any changes to daily oil production quotas. This inaction on the part of OPEC was not gleefully received by the market and, as a result, the value of crude oil fell even further, bringing all raw commodities, including gold and silver, with it. Now, as people rid themselves of commodity investments and energy shares, precious metals are left to wonder what will happen next. While it is unclear what the next few weeks have in store for gold, silver, oil, and other commodities, I can assure you that we will continue keeping an eye on the situation.
For the past half year or so, investors in the US and elsewhere have concerned themselves with the US Federal Reserve’s tentative plans to raise interest rates. In case you were unaware, the Fed has kept rates at near-zero levels for more than 6 years now.
While there was a general consensus that higher interest rates would not be realized until next Spring at the earliest, that very well might have just changed. Now, market experts are beginning to come to terms with the realization that the Fed may not make rate changes for some time yet. Despite the fact that the US employment sector is improving consistently, declining crude oil prices have many people worried that inflation will begin to become a problem if interest rates are too speedily increased.
In addition to this, the fact that the US economy is one of the only major economies doing well is yet another reason for rates to be kept at current levels. For gold and silver, interest rate hikes being delayed is an upbeat thing, but so long as crude oil continues to suffer, the upside derived from current interest rate levels will continue to be mostly mitigated.
Looking ahead to next week, it is already clear that the market will be preoccupied with speculation regarding the European Central Bank meeting. At present, there is a large quantity of investors who feel as though the ECB will announce some sort of policy shift at their upcoming meeting. Though there is no saying for sure whether a policy change will come as a result of next week’s meeting, you can bet that the market will be paying very close attention to anything and everything the ECB has to say.