Posted on February 18, 2015
Gold Spot Price Open: $1,208
Gold Spot Price Close: $1,213
Change in Gold Spot Price: +$5
Silver Spot Price Open: $16.46
Silver Spot Price Close: $16.58
Change in Silver Spot Price: +$0.12
After suffering from follow-through selling earlier in the day, precious metals were able to finish Wednesday on a positive note of sorts. When all was said and done, gold was able to pick up about 5 dollars while silver improved by more than ten cents. Platinum and palladium both lost on the day, both by a little underneath ten dollars.
Metals were able to pull themselves well up above daily lows thanks to FOMC minutes that were released later in the afternoon. As expected, the minutes were determined to be more dovish than anything else and this helped provide metals with some support while simultaneously taking momentum away from equities and the US Dollar. Officially, today’s minutes saw the Fed maintain that they will remain patient with regard to raising interest rates. The minutes went on to say that recently falling oil prices remain a concern for the Fed.
Prior to today’s minutes, much of the market was under the impression that interest rate hikes were coming around sometime around June. Now, however, the market seems convinced, yet again, that interest rate hikes will not come until closer to 2016, if not after the turn of the New Year.
Reports from the early morning hours indicated that some progress has been made from talks happening between Greece and their European creditors. Greece’s new government, who is desperately hoping to be able to pull back on austerity measures, has seemed to reach a breakthrough. The agreement reached today will see the current bailout plan extended by half of a year, which means that Greece will receive additional funds immediately. This is crucial because Greece was on their way to facing an inevitable credit crunch that would force them out of the European Union.
For gold and silver, today’s “breakthrough” put a damper on the safe-haven metals market because it injected a bit of confidence into the global marketplace. While this may be true, the reality of the matter is that Greece’s (and the EU’s problems) were only postponed today; no one is any closer to solving the underlying issues that will continue to work to decimate the Greek economy. In only a few month’s time, you can bet that the marketplace will once again be concerning itself with Greece’s financial and economic problems.
In other news from the Europe today, it is being reported that the ceasefire agreement currently taking hold in Ukraine is on the verge of collapsing…if it has not already collapsed entirely. At this point, preliminary reports regarding the latest ceasefire failing are not having too much of an impact on the global marketplace. This is surprising, especially for metals investors, because news of increased violence in Ukraine being taken seriously by investors would likely mean that safe-haven demand for gold and silver would tick upwards. As we head into the final two days of the week, it is my guess that we will continue to concern ourselves with the plethora of issues affecting the European Union in one way or another. In addition to this, investors will also be paying close attention to the weekly jobless claims report, due out tomorrow. Recent weeks have seen jobless claims tick upwards consistently, and this is a small, but growing concern for a large quantity of investors.