Posted on April 12, 2017
Gold Spot Price Open: $1,276
Gold Spot Price Close: $1,289
Change in Gold Spot Price: +$13
Silver Spot Price Open: $18.37
Silver Spot Price Close: $18.45
Change in Silver Spot Price: -$0.08
Precious metals continued their winning ways on Wednesday thanks to increasing safe-haven demand. When all was said and done, gold managed to add about 13 dollars while silver actually ended up adding close to 10 cents. Platinum and palladium finished the day mixed, but did not stray too far from even; something that has been a consistent theme of late.
There was some economic data in play on Wednesday, this time in the form of import prices recorded during March. In fact, March’s import price drop was the biggest we have seen in more than 7 months. According to the Labor Department, import prices fell by .2% during March after rising by double that amount during February. As far as year over year import price activity, this lowered the annual increase from the 4.8% recorded in February, to a new annual increase of just 4.2%. Part of the reason we saw import prices dive was due to the fact that crude oil prices were pushing lower for a large part of March. To put this in perspective, petroleum prices in March fell by 3.6%. This is largest such drop since August, back when a massive supply-glut was consistently pushing prices lower.
Now, with tensions across the Middle East and production cuts from OPEC nations looming, there is a strong expectation that crude oil prices will help give import prices a bit of a boost as we head further into the Spring.
If you exclude oil from import prices, March actually marked the 3rd consecutive month of increases. Prices for capital goods, as they are known, increased by .1% in March, building on February’s .2% increase. All in all, this data did not have any major implications for global equity and currency markets.
Gold and silver are adding value again on Wednesday thanks to many of the same geopolitical factors we have been concerning ourselves with for the past week or more. Just yesterday, President Trump took to Twitter to talk about North Korea. Though he didn’t have much to say, the President did say that the Hermit Kingdom is “looking for trouble.”
This tweet was in response to North Korea’s vowing to retaliate for the US sending warships to waters off the Korean Peninsula. Though the ships are said to be headed to the region in order to participate in drills with the South Korean Navy, North Korea has taken offense.
Also in the geopolitical headlines recently has been Syria, and the United States’ involvement there. Today, leaders from the US and Russia are sitting down to discuss the Syrian problem. At this present moment in time, however, it does not seem like a meeting of the minds is likely when you consider that Russia supports Syrian president Assad, while the US would like to see him removed from power. If no resolution can be made, there is no saying what might happen next with regard to US military actions in and around the country. All of these talking points are serving as a means of increasing an already jittery trading environment. Investors are presently on edge with regard to both of the aforementioned scenarios and more, so precious metals have been receiving plenty of safe-haven support.
All things considered, today was probably the most active we have had thus far this week. Though geopolitical concerns have not evolved too much, we were on the receiving end of some useful economic data. Tomorrow begins the observance of the Easter holiday for many people, so it is our expectation that the duration of the week will be quite subdued from an economic activity standpoint.