Gold Spot Price Open: $1,079
Gold Spot Price Close: $1,071
Change in Gold Spot Price: -$8
Silver Spot Price Open: $14.44
Silver Spot Price Close: $14.04
Change in Silver Spot Price: -$0.40
Gold and silver both lost value to open up what is looking like another thin, slow week of holiday trading. When all was said and done, gold managed to lose close to 10 dollars while silver’s losses edged over 40 cents. Platinum and palladium finished the day mixed, but neither metal ended the day too far from where they began it.
Crude Oil Slips Again, Brings Metals With It
During this week’s slow holiday trading, it was always going to be unlikely that gold and silver would make much of any gains. That proved to be almost immediately true on Monday as crude oil’s falling ended up having negative repercussions for both gold and silver spot values. Today saw crude oil decline as a direct result of declining profits from the industrial sector of the Chinese economy. It has been no secret that China’s lackluster performance economically has weighed on gold and silver (as well as other commodities), and today only served to further push along that belief.
In addition to crude oil moving downward, the Shanghai Stock Index lost more than 2.5% on the day, which marks one of the largest single-day losses since the end of November. With China’s industrial sector continually slowing down, the price of crude oil may only continue to suffer. This is so because if China is consuming less crude oil, the rest of the world will likely follow suit. Jeff Kravetz, from The Private Client Reserve of US Bank, told TheStreet that “oil has really pulled the market down throughout the year. There’s just a lot of concerns about global growth spearheaded by China so I think those factors created a very uncertain environment for investors.”
Russian Economy Thrown Off Track in November
For the first time in months, the Russian economy suffered a decline. Thanks to—you guessed it—declining crude oil prices, the large global economic player saw its GDP take a few steps backwards. Officially, November GDP for Russia backed off by 0.3% after gains of 0.1% and 0.3% in October and September. On an annualized basis, November 2015 GDP was 4% weaker than what it was a year ago. While this news is enough to send investors running, it is important to remember that ongoing sanctions imposed as a result of Russia’s involvement in the Ukranian conflict played a major role in this decline.
If crude oil continue to perform like it has been over the past month or so, Russia may be looking at even deeper declines to start off 2016. According to experts, the country may be in for even larger losses if geopolitical tensions between Russia and Turkey grow worse, as they are expected to. All in all, the immediate and medium-term future look bleak at best for the Russian economy. Without a drastic price increase on the part of oil, it is looking like Russia is just one more country that will be suffering from what looks to be an intensifying global economic slowdown.
Back here in the United States, all this talk of a slowdown has many people looking critically at the US Federal Reserve’s decision to hike interest rates a few weeks ago. It will be interesting to see what the Fed has to say at their next meeting about the topic, though that is quite a few weeks away.
Wrap-Up
If you couldn’t tell just from the lack of fresh economic data, today was yet another slow day of holiday trading. As we look ahead to the next few days I cannot envision much of anything changing. That is, of course, unless we are dealt some fresh, fundamental economic or geopolitical news capable of moving markets.
