Posted on February 26, 2015
Gold Spot Price Open: $1,204
Gold Spot Price Close: $1,210
Change in Gold Spot Price: +$6
Silver Spot Price Open: $16.54
Silver Spot Price Close: $16.65
Change in Silver Spot Price: +$0.11
Precious metals managed to make some decent gains today, despite being drug down from daily highs thanks to some better than expected economic data. When all was said and done, gold managed to pick up a bit more than 5 dollars while silver managed to pick up more than ten cents. Platinum and palladium did not move much at all today and finished in just about the same spot where they began.
Despite this week being mostly slow from an economic data standpoint, today offered a bit of respite in that regard. According to a report released during the mid-morning hours, consumer prices in January fell by .7% on an annualized basis. The report cited a steep decline in the price of crude oil as the main driver behind the drop in consumer prices. Still, the core reading of consumer prices, something that excludes difficult-to-predict food and energy prices, rose by .2% during January; more than the .1% increase expected by market experts.
Another report released today saw durable goods orders in the United States rise by 2.8% during January. All of this upbeat data has lifted the USD Index considerably today and took away from metals’ upside. Up until today, the greenback has had a pretty rough week.
In overnight news from the European Union, government bond prices rallied and saw yields that were hitting multi-month and record lows. The rally on the part of EU bonds is due to the fact that most investors expect the European Central Bank to begin purchasing Eurozone bonds in April. According to EU reports, EU government bonds are in short supply, so this may be another propellant behind today’s rally. Something else that is coming as a direct result of the ECB’s impending bond purchases is the rally of European stocks. EU stock indexes have been up all day and have fared well for the better part of the last two weeks.
Finally, there was some economic data from the European Union released this morning. According to reports, bank lending across the European Union declined by less than expected. Also, Germany saw its employment situation improve dramatically through the first few months of this year. Germany has long been the lone shining star as far as EU economies are concerned, so no one is too surprised by today’s data. It is still encouraging to see upbeat reports from a part of the world that has really been falling behind economically.
Despite the fact that economic activity across Asia is still more or less muted due to the celebration of the Lunar New Year, Asian stock markets are already beginning to rally on rumors that the Chinese central bank will further stimulate their economy. China’s National Congress officially sits down for their next session starting next week, so I imagine that we will receive a bit more clarification as to what kind of stimulus measures are planning on being imposed. For gold and silver, any rumors regarding a boosted Chinese economy are always going to be a bullish underlying factor of sorts.
As we look ahead to the final trading day of the week, I imagine that we will be given a bit more month-end economic data to mull over and discuss. The same can be said for next week, though next week’s trading session is looking like it will be dominated by economic data, both from the US and elsewhere around the world. From a precious metals perspective, it will be interesting to see if today’s gains can be sustained or possibly even built upon on the final day of the week.