Gold Spot Price Open: $1,250
Gold Spot Price Close: $1,239
Change in Gold Spot Price: -$11
Silver Spot Price Open: $15.86
Silver Spot Price Close: $15.83
Change in Silver Spot Price: -$0.03
After gaining nicely on Thursday, precious metals closed out the week having succumbed to some small profit-taking. When all was said and done, gold lost a little more than 10 dollars while silver moved downward to the tune of about 11 cents. Platinum lost a little more than five dollars while palladium actually managed to gain a dollar or two.
Profit-Taking Emerges to Close Out Week
Unsurprisingly, profit-taking after Thursday’s large gains was one of the main stories on Friday. For the gold and silver bulls, perhaps the most pleasing part of Friday was the fact that losses were very minimal, especially when compared to gains made a day earlier. To put into perspective just how well gold has been doing since the turn of the New Year, the yellow metal is up by more than 17% and still ahold of some very palpable momentum. Sitting at a one-year high, it will be interesting to see how gold and all other precious metals open up next week.
For many, it is difficult to envision a scenario where gold and silver do not keep rising. The fact of the matter is that global economic turmoil seems to be growing worse with each passing week, and this stands to benefit the precious metals market.
Another part of the reason behind metals’ poor performance to close out the week is the fact that equity markets have bounced back after recent losses. The energy sector is still lagging behind, but we are seeing gold mining shares pick up some of that slack. With more of a Chinese presence across the global market next week, equity market activity will more than likely be called into focus more than it was over the past 5 days.
US Advance Retail Sales Climb in January
After having weathered a few months’ worth of poor economic data from major economies all over the world, we were finally dealt some relatively upbeat data on Friday. According to the US Department of Commerce, the average US consumer spent more money during January than was originally forecast.
Officially, January retail sales climbed .2% to nearly $450 billion. Adding to the good news was a revisions that showed the holiday shopping season was not as slow as originally thought. December’s retail sales were revised upward to a new reading of an increase similar to what was recorded in January. Initially, the Commerce Department reported that retail sales in December had fallen by a tenth of a percent.
The main driver behind these upbeat retail sales report is the fact that gasoline prices have continued to fall. In fact, January saw prices at the pump fall by more than 3%. Earlier in the week when Yellen talked to Congress, she touched on the fact that cheaper gas may end up helping the economy grow. We have already begun to see this in the early parts of this month, so it will be interesting to see if this holds true through February and March.
Wrap-Up
Despite today’s losses, gold and silver ended the week having gained considerable value. Now that Chinese investors are returning from their Lunar New Year celebrations there will be a bit more market activity next week. A major talking point will be, as it has been for some time, will be the price action of crude oil as well as the movement of the US Dollar. Oil sort of balanced out through the week, but the Dollar is continuing to face stiff pressure pushing it downward. This is currently benefitting gold and silver as well as threatening the likelihood for further interest rate hikes this year.
