Gold Spot Price Open: $1,165
Gold Spot Price Close: $1,133
Change in Gold Spot Price: -$32
Silver Spot Price Open: $17.25
Silver Spot Price Close: $15.97
Change in Silver Spot Price: -$1.28
Precious metals, across the board, took massive hits on Thursday due to the FOMC finally announcing that they are going to hike interest rates. By the time the day came to an end, gold was down by more than 30 dollars while silver lost more than 1 dollar and 25 cents. Platinum and palladium did not fare well on the day either, as platinum lost more than 20 dollars while palladium conceded around 15 dollars.
Strong Greenback Sinks Gold and Silver
Because yesterday’s interest rate hike announcement was being described as being priced-in by the market, we are still seeing a rather large flee from precious metals as an investment. Spot values went tumbling as soon as the day began and did not really look back from there. Today’s story can best be summed up by a combination of multi-year lows on the part of gold and silver and multi-year highs on the part of the greenback.
Officially, gold started the day trading around a 10-year low while silver, not performing much better, started things off near an 8-year low.
Making matters worse was that overnight reactions to the FOMC’s decision ended up driving the USD Index to a 13-year high. In recent weeks we have seen a very clearly illustrated inverse relationship between metals and the Dollar, and today provided a perfect example of that.
It isn’t just the fact that the FOMC decided to raise rates that is providing the greenback with support and ultimately sinking precious metals. Instead, investors are reacting to the hawkish FOMC commentary which indicated that most members of the Fed are in agreeance that we will see at least 3 further rate hikes by the end of 2017. Most investors had anticipated that there would be, at best, 2 additional hikes next year, so that much came as a surprise to a lot of folks.
Finally, though crude oil is still mostly holding onto gains made earlier in the wake, the commodity’s upward progress has mostly been halted. This is not helping alleviate any of the pressure being levied against precious metals. Silver is now not only below the $17/ounce threshold, but has also sunk to below $16/ounce. It will be intriguing to see if Friday can spark a recovery at all, or if spot values will continue to move lower.
Weekly Jobless Claims Fall Again
Though not hawked over as much this week as it had been the previous 4 to 6, the weekly jobless claims report was delivered today and brought some more upbeat news with regard to the United States’ employment situation.
According to the Labor Department, the number of first-time claims for unemployment benefits fell by 4,000 last week, bringing the seasonally-adjusted average number of claims down to 254,000. As you may or may not be aware, this now marks 93 consecutive weeks where the number of seasonally-adjusted weekly jobless claims has fallen below the 300,000 mark. In the lead-up to this week’s FOMC meeting the weekly jobless claims report was a huge piece of data for investors to mull over and discuss, but this week’s instalment has been mostly overlooked by those who are continuing to speculate with regard to what a 25 basis point raise to interest rates means for them and their investing decisions.
Wrap-Up
All in all, Thursday was a continuation of Wednesday as investors the world over continued to discuss the FOMC’s interest rate hike decision. Though the weekly jobless claims data was taken into consideration, there was not much of a reaction to it. As we look forward to Friday, it will be interesting to see if the USD Index can continue gaining ground or if things will level off. The answer to this will also likely determine the direction metals head in to close out the week.
