Posted on March 13, 2017
Gold Spot Price Open: $1,207
Gold Spot Price Close: $1,206
Change in Gold Spot Price: NO CHANGE
Silver Spot Price Open: $17.10
Silver Spot Price Close: $16.95
Change in Silver Spot Price: -$0.15
Precious metals tried to trek forward to start the new week, but by day’s end finished closer to even. When all was said and done, gold ended up in about the same position it was in when the day began, while silver lost about 15 cents. Platinum and palladium finished the day mixed, with platinum losing a few dollars while palladium ended the day even.
While there is no denying that the FOMC meeting is the most heavily anticipated happening of the week, investors are also paying attention to European political proceedings. On Wednesday, The Netherlands will be holding their parliamentary elections, and there is some lingering fears that far-right candidates might take a foothold. Though the threat of far-right politicians is not as big in the Netherlands as it is in places like France, it is still something that will be focused on. The general train of thought suggests that if right-wing politicians take hold in the Dutch Parliament, then there is no way of stopping other far-right leaders, like Marine Le Pen from France, from gaining support.
In all, investors will be watching the Dutch elections in order to gain a better idea of how France’s April and May elections might pan out. For gold and silver, the fear created by the prospect of far right-leaning politicians taking hold in Europe is lending support for spot values. To be fair, the support being lent is not huge, but is enough to somewhat mitigate the pressure being levied against metals in the form of rate hike expectations.
Though we haven’t even officially gotten word of an interest rate hike quite yet, experts and market watchers alike are beginning to believe that the Fed may need to speed up the rate at which they are hiking rates. Ignazio Visco, of the European Central Bank, commented by saying, “Given the current situation of the U.S. economy, which is close to full employment, strong fiscal expansion risks having a pro-cyclical impact. In such a case, the process of normalizing monetary conditions undertaken by the Federal Reserve could be less gradual.”
The fear is that, if the Fed does not hike rates at least 3 times this year, President Trump’s fiscal policies may end up wreaking havoc on developing economies. Of course, all of this remains to be seen, but it is interesting to think about.
Tomorrow brings about the first of two days’ worth of meetings conducted by the Federal Open Market Committee. Unless you have been living under a rock, you know that the current expectations is for the Fed to announce that they will be raising interest rates for the first time in 2017.
Though it hasn’t happened yet, investors have already reacted as though a rate hike has occurred. In other words, a rate hike has already been priced in. Now, the attention of the investing public is being turned to the rest of the year. While only a month or so ago you would have been hard-pressed to find anyone who actually believed the Fed would follow through with 2 rate hikes in 2017, we are now seeing a growing number of people who think there should be up to 4 rate hikes executed before the calendars turn to 2018.
The FOMC is the main focus this week, but it seems as though they will remain in focus for much of the foreseeable future as well.
Though there will not be much in the way of fresh news tomorrow, that will not stop investors from focusing on the FOMC meeting. I anticipate that tomorrow will be a slow day of trading as investors mostly hold their positions in anticipation of Wednesday’s post-meeting statement. Barring any major developments on the geopolitical front or from other economies around the world, the undivided attention of the investing world will be placed on the FOMC.