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    JM Bullion Gold and Silver Market Update (2/22/16)

    Gold Spot Price Open: $1,226

    Gold Spot Price Close: $1,209

    Change in Gold Spot Price: -$17

    Silver Spot Price Open: $15.38

    Silver Spot Price Close: $15.18

    Change in Silver Spot Price: -$0.20

    Precious metals opened up the week poorly as risk-appetite seems to be gaining a bit of a foothold. When all was said and done, gold lost more than 15 dollars while silver fell by twenty cents. Platinum and palladium finished the day mixed, with platinum losing more than ten dollars while palladium actually picked up a few dollars.

    Manufacturing Flash PMI Falls to 51

    The US Manufacturing sector performed poorly during February according to a report that was released earlier this morning. According to Markit, February’s Flash Manufacturing Purchasing Manager’s Index fell to a reading of 51, down from a reading of over 52 during January. Any reading above the 50 mark indicates that the given sector of the economy is growing, but the fact that February’s data fell from the month before is unnerving for investors.

    Expectations were for February’s PMI to still be above 52, so it is easy to see why today’s data was mostly disappointing. According to Markit, “Manufacturers overwhelmingly linked the slowdown to softer underlying demand patterns in February, while only a small minority cited temporary weather-related disruptions. There were reports that weaker business sentiment, alongside uncertainty about the general economic outlook, had encouraged clients to delay spending decisions during the latest survey period.”

    What Markit’s report shows is that the weaker global economy is beginning to have an impact on things here in the United States. With companies not really sure how the rest of the year is going to go, cautiousness is beginning to take center stage. Until investors are more confident about what the future holds, spending on manufacturing is likely to stagnate, if not fall even further.

    Stock Indexes, Higher Dollar Force Precious Metals’ Hand

    Not helping metals at all on Monday was the fact that China’s Shanghai Index gained more than 2%, sparking risk-appetite that has been eerily absent in recent weeks. China’s decent performance to begin the week gave other stock indexes around the world enough momentum to also have decent days on Monday. Tying right into the better performance of equities to start the week is the fact that the US Dollar is also being seen making nice gains.

    China’s nice performance today is being credited to a decision by the Chinese government to reduce taxes on the sale of new homes. This move was aimed, like most initiatives recently, at finding some way to boost the struggling Chinese economy. While the whole of the Chinese economy is and has been performing poorly, the data on home sales has been particularly poor, with most Chinese citizens simply not feeling comfortable enough to spend large quantities of cash on a purchase as large as a home. Many feel as though the tax reduction is a step in the right direction, but there are doubts with regard to how much change a move this small will actually be able bring about.

    Wrap-Up

    As we look ahead to the rest of the week, it will be interesting to see if precious metals will continue to suffer at the hand of increased risk-appetite, or if gold and silver will be able to bounce back like we saw towards the end of last week. There is not much in the way of markets-moving economic data expected to be released, so things are looking like they will be quiet for a good majority of this 5-day trading session. With the end of the month fast-approaching, however, that much is subject to change.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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