Posted on February 12, 2015
Gold Spot Price Open: $1,224
Gold Spot Price Close: $1,225
Change in Gold Spot Price: +$1
Silver Spot Price Open: $16.89
Silver Spot Price Close: $16.91
Change in Silver Spot Price: +$0.02
Precious metals spent most of the day trading unchanged to slightly lower thanks to a noticeable risk-on attitude exhibited by global investors. When all was said and done, gold managed to gain about a dollar while silver picked up a few pennies. Platinum and palladium too also hovered near even for a majority of the day.
Since the onset of this week, leaders from Russia, Ukraine, and a handful of Western (mostly European) nations have been in Belarus trying to hash out any sort of ceasefire agreement between pro-Russian separatists and Ukrainian government forces. Despite the fact that the last few ceasefire efforts fell through fairly dramatically, talks in Belarus seem to have brought about a breakthrough. According to a number of reports released prior to US markets’ beginning the day, a tentative ceasefire agreement is set to begin on Sunday. Though experts and analysts agree that the aforementioned ceasefire is a long shot from lasting peace, it is definitely a step in the right direction.
Perhaps most surprising is the fact that German chancellor Angela Merkel praised Russian president Vladimir Putin for his participation and efforts during the talks this week. As a result of today’s ceasefire, stock markets in Europe and the United States found room to venture forward. Of course, better-performing equities made it extremely difficult for precious metals to gain, which mostly explains today’s inaction. As we move forward, it will be interesting to see how long this ceasefire agreement lasts as well as what side will be the first to break it (of course, this is assuming that will inevitably happen).
In a somewhat surprising move, Sweden’s Riksbank today announced that it would be introducing negative interest rates and will soon be launching the purchases of bonds in an effort to offset falling prices. This move only added to the overall uncertainty investors feel with regard to the European Union. Now, it seems as though every week a central bank is making some sort of surprise decision relating to interest rates and other aspects of monetary policy. Taking note of this trend, one can only imagine what next week has in store for investors.
Despite the fact that this week was not expected to bring about too much in the way of economic data, today was a bit of an exception. First, the United States weekly jobless claims report was published and showed that jobless claims last week rose by more than 25,000. Up above 300,000 from 279,000 only two weeks ago, investors are taking note of the somewhat weakening employment situation in the United States. For what it’s worth, analysts did not expect weekly jobless claims to exceed 290,000.
Making matters even worse for the US Dollar was a report claiming that retail sales in the US fell by .8% from December to January. Add this to the fact that a similar decline was witnessed from November to December, and you have yourself an increasingly bleak outlook on retail sales in the United States. This news sunk the US Dollar and likely played a role in keeping precious metals spot values afloat despite surging equities.
Looking ahead to the final day of the week, I anticipate that things will be extremely quiet and will see investors continue focusing on the many developments taking place across Europe. In addition to this, there will be some delayed reaction to today’s US economic data, but I think the last day of the week will be mostly quiet. For precious metals, this week has not been overly great or overly bad, but as we are all aware, that can all change in a single day.