Gold Spot Price Open: $1,249
Gold Spot Price Close: $1,218
Change in Gold Spot Price: -$31
Silver Spot Price Open: $15.90
Silver Spot Price Close: $15.26
Change in Silver Spot Price: -$0.64
Gold and silver both began the day moving noticeably lower and did not really stop that trend throughout the day. When all was said and done, gold lost more than 30 dollars while silver succumbed to losses of nearly 65 cents. Platinum and palladium also moved solidly lower with platinum losing more than 30 dollars in value while palladium was down by just about 15.
Improved Risk-Appetite Dooms Metals
With the terror attacks in Brussels barely a day in the rear-view mirror, it is surprising to see investors display such keen risk-on behaviors. Stock markets in the United States and Europe were seen moving upward straight from the offing on Wednesday, and this did gold and silver no favors whatsoever. Somewhat of a psychological blow for metals, but especially gold, is the fact that the last few weeks’ uptrend seems to have been halted, and the metal is showing that it may move even lower in the near-term.
Also not helping things at all is the fact that the US Dollar continues to perform well this week in the wake of an FOMC meeting that indicated interest rates may remain put until the summer, if not even longer. As it stands, the greenback is making gains against most rival currencies and is currently standing at a one-week high. With most experts, including Chicago Federal Reserve president Charles Evans, expecting no more than two rate hikes throughout the remainder of the year, the Dollar has a lot of upside potential at the present moment in time. This is even truer when you consider the negative rates in Europe and Japan. Gold and silver are not in bad positions at all, but so long as the market continues to trudge along as it has these past few days, trouble can mount quickly.
James Bullard Calls for April Rate Hikes
In statements made today, the president of the St. Louis Federal Reserve James Bullard called for his peers to consider raising rates again at their next meeting. When speaking to Bloomberg, Bullard said, “You get another strong jobs report, it looks like labor markets are improving, you could probably make a case for moving in April. I think we are going to end up overshooting on inflation.”
Bullard also made it clear that he thinks the overall unemployment rate will fall to 4.5% by the end of the year. Last month the figure remained unchanged and is currently hovering at 4.9%. Bullard also thinks that the Fed’s target inflation rate of 2% will be hit sometime in 2017, if not earlier.
The major piece of the puzzle that Bullard did not address this week is how outside forces will affect the economy as the rest of the year plays out. It is no secret that most global economies are struggling, and the feeling is that if the Fed moves too quickly to raise rates it may have a negative impact here at home. We have already seen that to some extent through the first three months of the year.
Wrap-Up
All in all, this was probably one of the worst single-day performances gold and silver put forth in the last few weeks. If things continue the way they have through the first half of the week then I am afraid the near-term outlook on precious metals will begin to deteriorate rapidly. Tomorrow, for all intents and purposes, is the last day of the week seeing as most markets will be closed in observance of the Easter holiday which, in many circles, begins this Friday.
