Gold Spot Price Open: $1,234
Gold Spot Price Close: $1,240
Change in Gold Spot Price: +$6
Silver Spot Price Open: $18.04
Silver Spot Price Close: $18.06
Change in Silver Spot Price: +$0.02
Precious metals managed to gain slightly on Thursday as the Dollar backed off from an impressive run of gains. When all was said and done, gold managed to tack on around 7 dollars while silver ended the day having gained about two pennies. Platinum and palladium gained on the day, but neither metal tacked on much more than a few dollars.
Dollar Snaps 11-Day Streak
Up until today, the Dollar had gained throughout most of the last two weeks. Though there still seems to be plenty of upside as far as the USD is concerned, the fact of the matter is that we are seeing investors cash in on profits made over the last two weeks. Naturally, the profit-taking on the part of greenback investors is working in favor of gold and silver.
Something else we can take away from today’s losses is that, perhaps, investors are not very confident interest rate hikes will come anytime soon. After Yellen’s testimony this week, the likelihood of a March rate hike has fallen off almost entirely. Commenting on this was Jiang Shu, chief analyst at Shandong Gold Group, when he said, “Perhaps the market is currently underestimating the prospects of an interest rate hike by the U.S. Federal Reserve in March, given the strong economic data.”
Though there were very few people expecting a March rate hike prior to her testimony, it is all but set in stone that a rate hike will not be happening anytime soon. Right now, the expectation is for the next hike to be in either June or July. With all of this being said, economic conditions in the US are continuing to improve, so I would not be at all surprised if the outlook on rate hikes changes in the near future.
Jobless Claims and Other Economic Data from the US
It’s Thursday, and that can only mean on thing—jobless claims data. Today, the US Department of Labor announced that weekly jobless claims rose by 5,000 last week from the week before. This brought the seasonally-adjusted average number of jobless claims up to 239,000. The 4-week moving average of jobless claims was also seen moving upwards, however only marginally. For gold and silver, downbeat employment data is usually good news. With that said, today’s data was mostly overlooked by investors.
In other US economic news, housing starts in the month of January rose by 1.6% from the month before. This brought the seasonally-adjusted number of units up to 1.25 million units. This was slightly better than expected.
Finally, the Commerce Department announced that building permits rose by more than 6.5% in January. This is quite a large increase and one that points to a busy Spring as far as construction projects are concerned. Like most of the other data points released today, this was also mostly overlooked by investors.
Wrap-Up
Precious metals did not move all that much on Thursday and the week as a whole is shaping up to be more of a miss than anything else, with not much in the way of gains nor losses being recorded. For precious metals, the biggest factor in play right now is the prospect of interest rate hikes. The fact that so many people are thinking that rate hikes will not come to fruition until the Summer is something that is currently playing in favor of gold and silver. Having said that, as we get closer to Summer the prospect of rising interest rate hikes might end up pushing spot values back downward.