Gold Spot Price Open: $1,067
Gold Spot Price Close: $1,056
Change in Gold Spot Price: -$11
Silver Spot Price Open: $14.17
Silver Spot Price Close: $14.09
Change in Silver Spot Price: -$0.08
Precious metals backed down on Wednesday after two consecutive days of gains thanks to the belief that the European Central Bank may make a large announcement on Thursday. When all was said and done, gold lost about ten dollars while silver lost a few pennies. Platinum and palladium backed down as well, both by about ten dollars.
Gold Falls Ahead of Expected ECB Announcement
After making gains on both Monday and Tuesday, gold and silver spot values backed down on Wednesday a day ahead of an all-important European Central Bank meeting. Falling alongside gold and silver today was the Euro, which hit a 7.5 month low against the USD. Pushing the Euro down was a report released today which showed that November inflation was unchanged from the month before. Expectations were for a slight inflation increase during November, so it is easy to see why this data hurt the Euro.
Further putting a damper on the Euro’s ability to make gains today was the fact that the marketplace is expecting to hear the ECB announce tomorrow that they will further increase their current monetary stimulus plans. If this does, in fact, take place tomorrow, you can expect that the Euro may face even more downside pressure going forward.
Mitsubishi analyst Jonathan Butler commented on the situation, saying, “Essentially the ECB and Friday’s non-farm payrolls look quite negative for precious metals, given the likelihood of further strengthening of the dollar on the back of potential quantitative easing in the euro zone, and further U.S. jobs growth.”
Fed Beige Book Comments on US Economy
The latest report from the Federal Reserve, also known as the Beige Book, showed that the US economy expanded modestly across the board during October and November. According to the Fed, a rise in consumer spending in conjunction with a stronger Dollar keeping inflation in check helped the US economy greatly.
Of the 12 Federal Reserve districts, 8 of them described October/November growth as modest, while Minneapolis reported moderate growth. A few other regions reported less than impressive growth over this period of time, but all in all things are looking generally upbeat across much of the US economy.
Overall, consumer spending across the United States appears to be rising at every turn, a very clear sign of an improving economy. In addition to this good news, the fact that gasoline prices have been lower for much of this year is something that is helping spur the purchase of automobiles. Big-ticket purchases such as those of cars and homes is something that has noticeably increased since the beginning of 2015. On top of all that, the strength of the US Dollar in recent weeks and months is such that the Dollars you spend are able to be stretched further than they would be during times where the greenback is beaten down. In general, recently received economic data has been upbeat and is only working to strengthen the belief that interest rates will be raised before the dawn of 2016.
Wrap-Up
Precious metals spot values did decline for the first time in a few days today, but this is nothing that is overly shocking to anyone. To be fair, current market conditions are almost wholly stacked against metals. This is something that will only grow truer if tomorrow brings about an ECB announcement that easy money policies across the region will be strengthened.
