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    JM Bullion Gold and Silver Market Update (4/21/16)

    Gold Spot Price Open: $1,255

    Gold Spot Price Close: $1,251

    Change in Gold Spot Price: -$4

    Silver Spot Price Open: $17.20

    Silver Spot Price Close: $17.08

    Change in Silver Spot Price: -$0.12

    Gold and silver did not perform well on Thursday, but they did not perform too poorly either when you consider the progress made in the past 7 days or so. When all was said and done, gold lost about 4 dollars while silver declined by little more than 10 cents. Platinum and palladium managed to gain on the day, but neither metal was able to tack on any more than 10 dollars.

    ECB Stands Tall to Mounting Concerns

    Of all the major economic regions of the world, there are few that are performing worse than the European Union has over the last year or more. Even after the implementation of a policy taken right from the Federal Reserve’s playbook, the region is still seeing little signs of marked recovery. Things have been getting marginally better in recent months, but that minimal progress is not doing much to sway the overarching negative attitude that most investors feel with regard to the EU and its many states.

    Mario Draghi and his colleagues did not choose to alter monetary policy at Thursday’s meeting and, in the eyes of many, what was said in the meeting’s wake reaffirmed the stances that the ECB has been taking for a while now. Not only did Draghi confirm that interest rates across the region will stay where they are right now or possibly go lower, he confirmed that the asset-purchasing plan aimed at devaluing the Euro currency in exchange for increased spending is going to see the expansion that has long-been talked about.

    In June, the plan is to add corporate bonds to the long list of assets that the Quantitative Easing plan purchases each and every month. Draghi was also quick to comment that the movement of the region’s interest rate(s) is (are) not going to be dictated by the existence or absence of QE measures. He maintained that low interest rates stand the possibility of extending far beyond the asset-purchasing program.

    Ultimately, European finance officials are attempting to boost inflation to the target 2%. Though inflation figures have improved somewhat, there are still quite a few very real concerns that the regions rate of inflation will not come anywhere near the 2% mark by year’s end. As you might have expected, today’s events and comments pushed the Euro downward and allowed the USD to gain back some of the ground that has been lost through the early parts of this week. In fact, the USD Index made gains overall, signaling that the greenback performed well against most of its major rivals today. For precious metals spot values, this was not such great news.

    Outside Markets Work Against Metals

    Despite the opposite being the case for the first few days of the week, outside markets on Thursday were mostly working against gold and silver. As was previously mentioned, the Dollar was stronger today, but another factor contributing to gold and silver’s weakness was the fact that crude oil prices moved even lower.

    Adding to the pressure faced by precious metals was that ever-persistent profit-taking factor that was bound to rear its ugly head after such solid gains opened up the week. All in all, things are still looking up for metals to make weekly gains by the time the dust settles on Friday. Silver briefly hit an 11-month high during intraday trading, so it will be really interesting to see where it ends up come closing time tomorrow.


    Thursday was not eventful in that it brought about a plethora of economic data, but was eventful thanks to the lively and specific commentary offered by leaders of the EU’s central bank. These comments are going to be more carefully hawked over by investors in the coming days and will likely impact many trading decisions that happen tomorrow, so I am anticipating a somewhat exciting conclusion to this week. It will also be interesting to see if gold and silver can bounce back after this midweek trough, or if they will once again fade out on Friday and possibly even post poor 5-day numbers as well.

    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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