Gold Spot Price Open: $1,264
Gold Spot Price Close: $1,264
Change in Gold Spot Price: NO CHANGE
Silver Spot Price Open: $15.65
Silver Spot Price Close: $15.38
Change in Silver Spot Price: -$0.27
Gold and silver finished the day mixed, though it is clear to see that safe-haven demand and risk aversion are both on the rise. When all was said and done, gold did not gain nor lose any value while silver lost close to thirty cents. Platinum and palladium moved downward on the day, with both metals losing close to ten dollars or so.
Weak Chinese Data Hurts Stocks
Before US markets even opened on Tuesday we were dealt a report from China that showed import/export data that was weaker than expected. According to the data, exports from China fell by more than 25% during February. This figure is being attributed to a weaker global economy, as you might expect, but is only being intensified by the one-week economic shutdown that occurred during the celebration of the Lunar New Year.
Hurting stocks even further today was the fact that crude oil prices fell from highs reached a day ago. The move downward came after market analysts almost unanimously agreed that the current rally in the price of oil is not sustainable over an extended period of time. The reason this is the case is due to the fact that energy prices are not as low as they should be to spur further consumption. Without the cost of energy moving downward to some degree it will always be difficult for crude oil to gain value and hang on to it.
For gold and silver, the fact that equities performed poorly today helped boost spot values and gave risk-aversion a bit of a boost. With the Chinese economy looking anything but stable at the present moment in time, we might be set to see gold and silver move higher yet again. Of course, that could change depending on the outcome of the European Central Bank meeting this week.
German Industrial Production Surges in January
Though it may be quite contrary to what we have grown accustomed to seeing and hearing, we were finally dealt some good news out of Europe today. According to data released this morning, January industrial production in Germany rose by the most in more than 5 years. This goes to show that while outside forces may be working to bring the German economy down, domestic demand is helping give the German economy some nice underlying strength.
January industrial production was more than 3% better than December’s reading. This is great news considering December’s industrial production data was anything but promising. This is the first gain industrial production has seen in a quarter of a year and easily bested expectations for growth of around a half percent month over month. While there is no denying that this is a good start for the German economy in 2016, there is also no denying that many obstacles lie ahead for the German economy as well as the other economies that make up the EU.
Wrap-Up
All in all, Tuesday was a rather light day from an economic activity point of view. A few reports were dealt from Europe and China, but the fact of the matter is that investors are still primarily concerned with what the ECB will have to say at their meeting on Thursday. For gold and silver, the first two days of the week have seen momentum established, however there is no guaranteeing that it will be carried through the end of the week. For now, the fact that equities are performing poorly is something that helps precious metals and will continue to do so barring any surprising outcome from the European Central Bank meeting.
