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    JM Bullion Gold and Silver Market Update (12/18/14)

    Gold Spot Price Open: $1,196

    Gold Spot Price Close: $1,199

    Change in Gold Spot Price: +$3

    Silver Spot Price Open: $15.96

    Silver Spot Price Close: $15.93

    Change in Silver Spot Price: -$0.03

    Gold and silver spot values began this morning adding good value, but shied away from daily highs by the time the day was through. When all was said and done, gold managed to gain a few dollars while silver managed to lose close to five cents. Platinum and palladium finished the day mixed, but neither metal added nor lost all that much value.

    Russian Economic Crisis Causing the Rest of Europe Problems

    Over the course of the past year, it has been well-documented that Russia is experiencing its fair share of economic troubles. Not only has the ruble lost more than half of its value against the US Dollar, crude oil, which is one of Russia’s biggest exports, has been declining in value for the better part of the last two months. All told, Russia is in dire straights and is in need of an economic lifeline.

    Just today, a report was published claiming that Russia’s economic problems are beginning to spill over and effect the rest of Europe. In an effort to curb this negative impact, the Swiss central bank today made a surprise move by instituting negative deposit rates. These negative deposit rates are being pursued by the Swiss as a means of preventing an inflow of rubles to Switzerland. As more Russians pull out their rubles and look elsewhere for safe-haven, neighboring countries’ banks and currencies are the place that is most often fled to.

    Though it is still early and we have not seen Russia’s economic shortcomings impact the rest of Europe too much, the potential for a lasting negative impact is very real. This is definitely something we will be continuing to watch over the course of the coming weeks and months.

    Fed Thinks US Economy Needs More Help

    After the conclusion of yesterday’s FOMC meeting, it only makes sense that the market is still very concerned with how the Fed perceives the strength of the US economy as well as how they feel about interest rate hikes.
    From the outside looking in, the US economy, apart from lingering pains from the Great Recession, is performing quite well. Over the course of the last year or more, the US economy has grown significantly and is now one of the best performers in the world. With an unemployment rate under 6%, unusually low inflation, and crashing crude oil prices, the life of the average American citizen has improved dramatically since we were feeling the throngs the recession in 2008.

    Despite all this, the US Federal Reserve remains extremely cautious about raising interest rates here at home. Time after time, investors are greeted with language from Janet Yellen saying that there is still “considerable time” until interest rates are going to be raised. While this type of language may be extremely confusing to investors, there are a number of factors that your average investors doesn’t consider, but the Fed does.

    In case you were unaware, the Fed has now kept interest rates at near-0 levels for the past 6 years as a means of encouraging borrowing, investment, and spending. Still, these low-level interest rates have failed to completely and totally repair the economic situation in the United States. Though the unemployment rate is low, far too many skilled workers are stuck with part-time jobs that they are not only overqualified for, but not making enough from. In addition to this, purchases of new homes have been on the decline recently and with falling crude oil prices pushing inflation down, the fear is that this type of situation may breed decreased spending; something that may further drive down the growth of wages.

    When it comes down to it, it may be frustrating that the Fed has not yet raised interest rates, but when all factors are considered, you really can’t blame them for retaining current interest rates. Still, it will be interesting to see this situation unfold as we head into the new year.


    From the looks of it, we are in for a fairly lackluster last few days of the week and are due for almost no markets-moving economic data through the end of the day Friday. Investors will still be analyzing the data and commentary from the Fed, but I doubt that it will breed too much in the way of price action for gold and silver.

    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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