Posted on February 27, 2015
Gold Spot Price Open: $1,211
Gold Spot Price Close: $1,215
Change in Gold Spot Price: +$4
Silver Spot Price Open: $16.67
Silver Spot Price Close: $16.65
Change in Silver Spot Price: -$0.02
Precious metals finished the day mixed, but are going to be able to reflect upon weekly gains for the first time this month. When all was said and done, gold picked up around 4 dollars while silver fell to the tune of 2 cents. Platinum and palladium both gained on the day, but neither metal was able to make gains too far beyond $5.
This week, and many of the last few weeks, has been quiet from an economic data standpoint, but that much changed today upon the release of some US GDP Data. According to a few reports, US GDP for the fourth quarter of 2014 rose by about 2.2%. Preliminary expectations were for an annualized increase of 2%, so today’s figures were just bit better than expectations. Despite the fact that GDP data beat the expectations of the market, stocks, precious metals, and the Dollar really didn’t have too much of a reaction to the data itself.
As we look ahead to next week, I anticipate that we will be on the receiving end of quite a bit of month-end economic data from the US and elsewhere around the world. For the first time in roughly three weeks, we may finally experience an action-packed 5-day trading session.
For the better part of the past year, demand for physical gold in India has been but a shadow of what it has been historically. The reason for this is due to the fact that the Indian government somewhat recently imposed a tariff on all gold that is imported. Because of this tariff, Indian citizens were forced to pay a premium price for the yellow metals and, thus, ended up not buying much of it at all. In recent days, demand for physical gold from India has been especially weak, but for a different reason than you might expect.
As it stands, there are countless rumors circulating saying that the Indian government is on the verge of either reducing or completely eliminating the tariff on imported gold. For this reason, many prospective purchasers of the metal are holding out and seeing if these rumors come to fruition. If India’s tariff on imported gold goes away, this will be a massive bullish factor for precious metals as it means that demand for gold from India will be back to normal. To put this all in perspective, India is historically one of the biggest consumers of precious metals every year, so this is very big news.
As we wrap the month of February up and look ahead to March, most investors have no idea what to expect. February was particularly hard on precious metals, so the preliminary belief is that March just has to be better. We will begin to find out whether this is true or not come next week when loads of month-end economic data will be made public for investors to discuss and mull over. In addition to all of this, we will continue to analyze things like the USD Index, US stock indexes, as well as the price of crude oil as all of the above have the ability to alter the direction in which spot values head.