Posted on November 03, 2014
Gold Spot Price Open: $1,171
Gold Spot Price Close: $1,166
Change in Gold Spot Price: -$5
Silver Spot Price Open: $16.19
Silver Spot Price Close: $16.17
Change in Silver Spot Price: -$0.02
Precious metals got the first full week of trading in November underway in less than stellar fashion by holding steady for most of the day. When all was said and done, gold lost about five dollars while silver’s losses were in the neighborhood of about 2 pennies. Platinum and palladium, however, both added between $5 and $10 respectively.
Generally speaking, the Dollar has been doing extremely well as of late, and even better after last week’s more hawkish FOMC statement and subsequent economic data from the United States. Now, on Monday, the Dollar is trading higher against the Yen. In fact, the Dollar is doing better against the Yen today than at any other point in the last 7 years or so.
The reasons for the Dollar’s recent surge is the slew of upbeat economic data stemming from the United States in addition to a big monetary stimulus package that was announced by the Bank of Japan last week. With the Japanese actively working to devalue their currency, and the United States seemingly on the verge of raising interest rates, the values of the greenback and yen are likely to continue having somewhat of an inverse relationship.
The USD Index, which measures the greenback against a basket of rival currencies is, as expected, has also been trending higher over the course of the last few days.
Though the first half of this trading week is expected to be mostly slow and devoid of any major economic happenings, the same cannot be said about the last two days of this week. On Thursday, perhaps the biggest happening of the week will take place in the form of the most recent European Central Bank policy meeting.
At present, most investors are holding their positions because they are expecting a noteworthy announcement out of the European Union. Christ Weston, market strategist at IG, commented on the expectations of investors by saying, “The fact the euro has also fallen relative to the yen and British pound (despite growing concerns from Angela Merkel about the U.K. leaving the EU) highlights the fact traders are now expecting some sort of retaliation from the ECB at this Thursday’s central bank meeting.” If any major policy shift is announced by the European Central Bank this week, most experts are anticipating that this will only add to the pressure being felt by precious metals.
To be fair, today was perhaps the quietest trading day we have experienced since last week. The same will likely prove to be true up until Wednesday or Thursday, at which point the week will begin to gain a bit of momentum. Though currently, this week is looking like it will only add more pressure on gold and silver, there is still a chance that low prices combined with some unforeseen economic data can help bring precious metals back to where they were before late last week’s collapse.