Gold Spot Price Open: $1,232
Gold Spot Price Close: $1,242
Change in Gold Spot Price: +$10
Silver Spot Price Open: $19.63
Silver Spot Price Close: $19.92
Change in Silver Spot Price: +$0.29
Gold and silver were both able to post modest gains on the first day of what is expected to be a quiet week as far as economic data is concerned. When the day was through, gold gained around ten dollars while silver managed to pick up just a penny shy of thirty cents.
Though this week is not expected to emit any major news as far as the US economy is concerned, investors from both the US and across the globe will be speculating with regard to the timing of QE’s tapering. With the December FOMC policy meeting scheduled to kick off next Tuesday, every type of investor will be articulating why they think QE will be tapered this go around or why they think the Fed will wait a bit until they make the decision to reduce their monthly bond-buying program. Despite all this speculation, some investors are beginning to believe that the possible tapering of QE is not nearly as big of a deal as a majority of the market is making it out to be.
These investors are not as intimidated by and/or apprehensive about Quantitative Easing possibly being reduced because of two reasons. The first reason is because the precious metals market has grown used to and adjusted to the threat of Quantitative Easing. Because we have been anticipating a reduction to the Fed’s monthly bond-buying program for a while now, investors, and thus the market, will not be as surprised when tapering is finally announced. Another reason the impact of reducing QE may not be as severe as once feared is due to the fact that the spot values of gold and silver have already more or less adjusted to a tapering of QE. Prices have dropped so drastically based on the “fear of” tapering that when tapering actually occurs everyone who would have gotten rid of their precious metals holdings will have likely already done so.
Regardless, investors will undoubtedly still be interested to hear whether or not the FOMC decides to make a move this time around.
In other news today, the European Union’s leading economy, Germany, recorded a significant decline in industrial production from September to October. Compared to market expectations of a near 1% rise in industrial production, actual figures showed that production decline by over 1%. That wasn’t the only dismal report from the EU today either as it was reported that Greece’s economy contracted, on an annualized basis, this third quarter. Despite the Greek economy having contracted for well over 6 years now, many projections see the Greek finally turning things around in 2014.
