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    JM Bullion Gold and Silver Market Update (4/19/16)

    Gold Spot Price Open: $1,236

    Gold Spot Price Close: $1,253

    Change in Gold Spot Price: +$17

    Silver Spot Price Open: $16.30

    Silver Spot Price Close: $16.96

    Change in Silver Spot Price: +$0.66

    Precious metals gained across the board on Tuesday thanks, in large part, to crude oil prices that have bounced back from the last few days’ losses. When all was said and done, gold managed to tack on about 17 dollars while silver’s gains easily eclipsed 60 cents.

    Crude Oil Surges, Brings Metals Along for the Ride

    The price of a barrel of crude oil surprised many people today by moving back up above the $40 mark. Even though no deal was reached by the end of this past weekend’s OPEC meeting, investors are thinking that the output of crude oil from the Middle East may be taking a bit of a hit in the very near future. The reason for this? A now three-day strike in Kuwait on the part of oil workers who are seeking the implementation of reforms that have been promised by the government for some time now.

    At this point in time, there doesn’t seem to an immediate resolution to the issues presented by Kuwaiti workers, and this is helping keep the price of oil propped up. To put things in perspective, Kuwait is now outputting just barely more than 1 million barrels of crude oil, down from a daily mark of about 3 million that was the norm just a few months ago.

    Silver Surges to 10.5 Month High on Miscellaneous Economic Data

    It wasn’t just crude oil that was helping precious metals on Tuesday, as many markets from around the world produced economic data that missed expectations. The only piece of data that was not disappointing was a German consumer confidence index report that showed a massive jump from March to April. Despite this large jump, the index and consumer confidence as a whole in Germany is far from where it should be.

    From the US, investors today were dealt some housing data that missed the mark and worked to add to the belief that Q1 was just as poor for the US economy as it was for most other major global economic powers. In addition to housing starts declining in March, permits for homes to be built in the future also took a dip last month.

    Officially, construction on new homes declined by more than 8% last month, bringing the seasonally-adjusted average of housing starts down to just over 1 million units—a figure that is the lowest we have seen since last October. Permits for future home building projects also fell by such a large margin that they are now at their lowest point in more than 12 months. This negative news, though good for gold and silver, does not take away from the fact that the housing sector has been one of the strongest aspects of the US economy for quite some time now. What we are really seeing, many analysts think, is a decreased interest in home purchases due to the uncertainty of the future and what it holds not only for the US economy, but for the global economy overall. With prices at the pump beginning to slowly tick back upward and a Presidential election drawing ever-nearer, potential home-buyers are not so eager to commit themselves to mortgages that span 15+ years. Until the waters clear themselves up a bit, the murky outlook on the future that investors are presented with presently will begin to affect spending in the US. All that disposable income created by cheaper fuel prices seems to be something of the past at this point.

    Wrap-Up

    All in all Tuesday was an exciting day across the global marketplace despite not much changing on the fundamental level. It wasn’t really risk-aversion that was driving investors to precious metals, but rather a leading commodity that is trying its hardest to rebound. It will be interesting to see how precious metals fare through Wednesday and the rest of the week after today’s gains.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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