Gold Spot Price Open: $1,234
Gold Spot Price Close: $1,263
Change in Gold Spot Price: +$29
Silver Spot Price Open: $19.75
Silver Spot Price Close: $20.43
Change in Silver Spot Price: +$0.68
Gold and silver posted decent gains for the second day in a row on Tuesday as market bears seem to have lost their momentum. When all was said and done, gold picked up just a dollar shy of $30 while silver gained almost 70 cents.
Though Tuesday was mostly quiet, comments by ECB president Mario Draghi caught the attention of the world marketplace. Draghi made it clear that while inflation in the EU is at record lows, the region is likely going to avoid a period of deflation. Only a few weeks ago, record low inflation rates had investors across the globe worried that the EU may fall victim to rapid deflation. Fortunately, however, the European Central Bank recently decided to slash its key interest rate; a decision that very well might have saved the EU from inordinately low inflation rates.
Apart from Draghi’s comments, the world marketplace remained relatively quiet on Tuesday. Now, as we head into the latter stages of the week, investors are becoming more and more preoccupied with the possible tapering of QE that may happen at next week’s FOMC policy meeting. Even though a tapering announcement may be made next week, it is likely that such an announcement will not have as big of an impact on the precious metals market as originally thought. Because investors have been expecting QE to be tapered for the last half year or so, the market will not be as shocked when the announcement is actually made and thus precious metals spot values will not fall as drastically as originally thought. Not only that, but the current spot values of gold and silver are indicative of a precious metals market that has already adjusted to a market with reduced QE.
With that being said, the investing world will still pay particular attention to the FOMC meeting next week in hopes of hearing more about the future of monetary policy in the US.
