Posted on February 10, 2015
Gold Spot Price Open: $1,241
Gold Spot Price Close: $1,235
Change in Gold Spot Price: -$6
Silver Spot Price Open: $17.11
Silver Spot Price Close: $16.99
Change in Silver Spot Price: -$0.12
Precious metals were seen conceding some value for a majority of the day on Tuesday thanks, in large part, to a stronger US Dollar as well as better-performing US equities. When all was said and done, gold lost about 6 dollars while silver declined to the tune of 10 or so cents. Platinum and palladium also declined today, both by more than ten dollars apiece.
Because this week has been so slow from an economic data standpoint, the market is continuing to focus on Greece and its inability to cooperate with the EU. For yet another day, Greece’s new government is openly abandoning its pre-approved debt reduction and austerity measures. This is such a big deal because the measures which Greece is abandoning are what the EU laid out as a prerequisite for EU-brokered financial help. Germany, who is one of the biggest lenders to troubled EU economies, is especially angry with Greece’s new government’s lack of cooperation.
This news only furthers the growing belief that Greece may soon be on its way out of the European Union. In fact, many fear that because Greece may exit the EU, other, smaller EU countries may be prompted to do the same. All this is only adding to the overall sense of uncertainty investors are feeling towards the European Union. So long as uncertainty continues, gold and silver are likely to be beneficiaries. Today’s news from Greece did not affect the global marketplace too much, but likely helped in limiting losses incurred by gold and silver.
As the Euro continues to lag thanks to the plethora of worries surrounding the Greek economy, the USD Index is moving forward. Today, the Dollar made impressive strides forward and really limited gold and silver’s ability to benefit from the turbulence surrounding Greece.
Additionally, the US Dollar is benefiting from crude oil prices that have once again backed down; most likely thanks to profit-taking after recent gains. There are some market experts/analysts who believe that crude oil may be destined for further losses, but oil’s recent chart action suggests that a near-term bottom has been established. At the end of the day, all of these outside market forces are really helping the US Dollar retain momentum. For precious metals, the greenback’s momentum is a major contributing factor to recent losses.
Thanks to this week remaining on the slow side of things, precious metals have not moved too far in any single direction for yet another day. What may become a bigger news story in the coming days and weeks is the fact that two voting members of the Federal Reserve commented today saying that rates should be raised sometime in the near future. Today, Richmond Federal Reserve President Jeffrey Lacker ruffled a few featherss by saying, “At this point, I think June looks like the attractive option (for interest rate hikes). The data could change that, but it would have to be surprising data for me.”
It will be interesting to see if other voting members of the US Federal Reserve feel the same as Lacker, or if they are still holding steadfast to the belief that rates should be kept at current levels until sometime in 2016.