Gold Spot Price Open: $1,180
Gold Spot Price Close: $1,173
Change in Gold Spot Price: -$7
Silver Spot Price Open: $16.81
Silver Spot Price Close: $16.71
Change in Silver Spot Price: -$0.10
Precious metals continued their losing ways to begin the week and gold hit a fresh 10-month low early Monday as bearish market conditions continue to weigh on spot values. When all was said and done, gold ended up losing about 7 dollars while silver conceded about 10 cents. Platinum and palladium did ok on the day, as both metals picked up a little more than 5 dollars.
Euro Gains on Italian Referendum Result
The Euro ended up pressuring the US Dollar thanks to the weekend referendum and what it means for the future of the country. For those who are unaware, the vote this weekend centered on potential amendments to the Italian Constitution that were championed by Prime Minister Matteo Renzi. Unfortunately for Renzi, Italian citizens handily opposed Constitutional reform. As a result, we are expecting that Renzi will submit his resignation in the coming days.
If Renzi does, in fact, resign, the belief is that a prime minister election will take place sometime early during 2017. This is not set in stone, but if history is any indication of the future this is what will likely play out. If a prime minister election isn’t held in the near future, it is likely that an interim government will be put in place until a formal election is held at the beginning of 2018. Regardless of when an election will be held, the big talking point will be whether Italy, like the UK, will take on more of an anti-EU sentiment or not. It will be interesting to watch this play out over the coming months and longer. Apart from the Euro making some gains, the Italian referendum did not have a major impact on global financial markets.
ISM Non-Manufacturing Data Weighs on Metals
Being that the US economy is largely comprised of services, it is no wonder that the non-manufacturing data released by the Institute for Supply Management tends to be hawked over by investors. As you might have expected, November yielded more positive data and gave even more support to the widespread belief that interest rates will be raised before the end of the month.
Officially, the ISM non-manufacturing PMI for November came in at a reading of 57.2%. This is up from October’s reading of 54.8% and handily beat expectations which called for the index to read around an even 55%. Today’s PMI ended up being the best we have seen since October of 2015. Once more, this report really does a good job of keeping spot values subdued while simultaneously boosting expectations for a December interest rate hike announcement. Although, to be fair, there are very few holdouts who do not foresee the FOMC announcing the hiking of rates. From now until the FOMC meeting actually gets underway, the debate will be much more focused on how drastically baseline rates will be raised as opposed to whether or not they will be raised.
This week is sure to bring about further economic reports, all of which will impact spot values in some way or another.
Wrap-Up
Once again, we are reporting on what has proven to be another sub-par day for precious metals. Apart from higher crude oil prices, which are lending some support to gold and silver, there wasn’t much out there that could have boosted spot values. The lower Dollar also helped gold bounce back from the 10-month low recorded in the morning, but did not help with much more than that. As we head further into the week you can expect an influx of economic data and reports. The tone of recent US economic data has been overwhelmingly positive, and so long as that remains the case gold and silver will have a tough time doing anything other than move backwards.
