Posted on March 07, 2017
Gold Spot Price Open: $1,230
Gold Spot Price Close: $1,219
Change in Gold Spot Price: -$11
Silver Spot Price Open: $17.89
Silver Spot Price Close: $17.48
Change in Silver Spot Price: -$0.41
Gold and silver fell again on Tuesday as they are both finding it very difficult to gain any solid footing in the midst of all this rate hike talk. When all was said and done, gold was down by about 11 dollars while silver conceded more than 40 cents. Platinum lost almost 20 dollars on the day, but palladium hung tough and managed to finish the day right where it began.
Precious metals are continuing to lose value as expectations that a rate hike announcement will be made this month gain momentum. Gold sunk to a 6-week low during the first part of Tuesday’s trading, and the upside potential for the yellow metal seems to be shrinking quickly. Accelerating the decline of precious metals spot values is the fact that the USD is gaining a lot of ground as rate hike expectations do too.
While things have not exactly been positive for precious metals in recent days, there are plenty of analysts who think that things could have been a lot worse. With February’s payrolls data still up in the air, the Dollar can only advance so much. That data is due out at the end of the week, and if it is overly positive you can bet that the Dollar will gain some more momentum. After all, an upbeat employment report will do a lot to further boost the belief that rates will be hiked before March is through. The FOMC meeting is being held next week, so only time will tell if a rate hike announcement will be made.
With all of that being said, something that is worth repeating is the fact that the marketplace is already beginning to price in a rate hike. What this means is that, for gold and silver, a rate hike announcement actually taking place may not push spot values all that much lower. While that is subject to change, the fact of the matter is that the global marketplace is very much anticipating a rate hike announcement, and has already been acting as though the announcement was made.
One of the biggest data points released this week will come on Friday in the form of the non-farm payrolls data from February. Though the employment data stream for the week will begin tomorrow with the ADP private-sector jobs growth report, it goes without saying that the non-farms data is always viewed as being the most important. Right now, the expectation is that the US economy added a healthy 190,000 new non-farm jobs to the economy last month. This is a lofty expectation, but one that, if met, will convince any and all holdouts that next week’s FOMC meeting will result in a rate hike announcement.
In other news, this time from Europe, there are budding worries that the UK may not be able to grow its economy once it finally leaves the EU. Just around the corner will be when the UK officially exits the EU, and investors are concerned with what this might mean for the United Kingdom’s economic future. Couple that with the upcoming French presidential elections, and there is a lot of concern floating around Europe at present. While this is something that definitely benefits precious metals, the overall risk-appetite of global investors is fairly high and doing its part to prevent safe-haven gold and silver from gaining much of any support.
As far as economic data is concerned, Tuesday was fairly light and uneventful. With that being said, the rest of the week is sure to bring about a good bit of data. Apart from that, you can expect that the prospect of hiked interest rates will remain in the headlines throughout the foreseeable future.