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    JM Bullion Gold and Silver Market Update (12/12/16)

    Gold Spot Price Open: $1,163

    Gold Spot Price Close: $1,165

    Change in Gold Spot Price: +$2

    Silver Spot Price Open: $16.93

    Silver Spot Price Close: $17.06

    Change in Silver Spot Price: +$0.13

    Gold and silver opened up the week in an interesting way, with both metals moving in opposite directions but not managing to finish far from where they opened. When all was said and done, gold gained a dollar or two while silver accrued gains of about thirteen cents. Platinum and palladium both finished the day mixed, with platinum gaining about 15 dollars while palladium lost a just shy of ten dollars.

    Non-OPEC Nations Agree to Production Cuts

    The spot value of oil in particular, and the energy sector in general, both performed well to begin the week after it was announced that non-OPEC member nations are going to work in conjunction with the oil cartel to slash daily production of crude oil. Due to an ongoing supply-glut that is actively working to keep the price of oil subdued, a grouping of nations have finally decided that it would be in their collective best interest to reduce daily outputs. If all goes as planned, the reduction in daily oil production will drive up prices beyond what we have been experiencing for what is going on two years now.

    As for what this means for gold and silver—and most other precious metals, for that matter—it is believed that a production cut will help spot values. Metals are seeing some of the all too familiar selling pressure lightened in the wake of this OPEC-related news. So long as crude oil prices move further and further above $50/barrel, the belief is that gold and silver will see selling pressure gradually lightened. Of course, stronger stocks as well as a stronger USD are going to be two factors that will ensure metals do not venture too far forward, but all in all it seems as though the tide is shifting to an extent.

    A group of non-OPEC nations, which includes Mexico and Russia, agreed on Saturday that they would be cutting their daily production of crude oil by what amounts to roughly 500,000 barrels per day. This is a massive supply cut that will account for a 2% reduction in the total number of barrels of oil produced every day. Though this may not seem like much, it is believed to be something that will massively help economies that are struggling as a result of the elongated supply-glut. For consumers at the pump, this is not the best news to wake up to on a Monday.

    Long-Awaited FOMC Meeting Kicks Off on Tuesday

    The Federal Open Market Committee is finally set to hold their December policy meeting. Unless you have been living under a rock, you are fully aware of the importance this meeting is said to have. The reason for this is due to the fact that it is believed by a majority of investors that the Fed will announce the hiking of interest rates in the US.

    The FOMC meeting officially wraps up on Wednesday, after which a post-meeting statement will be delivered by Janet Yellen. What will truly be interesting to see is whether or not the Fed elaborates upon just how drastically rates will be raised. That is a huge point of contention at this current juncture, with some thinking rates will be boosted dramatically, while others are anticipating a small hike with the promise of further hikes to complement it. For the next day or so, you can expect to see a lot of traders hold their positions in order to uncover more details about the supposed hike.


    All things told, Monday was not the most exciting day in recent history, but we did receive some important news from the crude oil world. Now the market’s attention will shift to the FOMC for the next 2 days. For precious metals, I would anticipate that, until Wednesday afternoon, price movements will be quite small. We are witnessing one giant waiting game that will take place from now until the FOMC makes their post-meeting statement.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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