Posted on April 03, 2017
Gold Spot Price Open: $1,251
Gold Spot Price Close: $1,257
Change in Gold Spot Price: +$6
Silver Spot Price Open: $18.33
Silver Spot Price Close: $18.25
Change in Silver Spot Price: -$0.08
Precious metals might have posted gains on Monday, but it is quickly looking more and more like the tide might be shifting as risk-appetite upticks. When all was said and done, gold started out the first trading day of Q2 by adding roughly 6 dollars while silver, on the other hand, lost in upwards of 10 cents. Platinum and palladium were both up, but neither metal added much more than a few dollars.
Something we are beginning to see is a rebound on the part of US equities as well as the US Dollar. After having been beaten down for almost 2 consecutive weeks, investors are exhibiting a bit more risk-appetite as it is widely expected that this week’s economic data stream will reaffirm the belief that the US economy is performing just fine. If this proves to be the case, precious metals’ days on the up and up might very well be numbered.
Something else that could potentially drive risk-appetite (or potentially kill it) is a meeting this week between US President Donald Trump and Chinese leader Xi Jinping. A number of different issues will be discussed at the meeting, and considering Trump’s rather heated rhetoric with regard to China since his inauguration in January, this meeting has caught the undivided attention of most investors the world over.
In all, the big news this week will come in the form of the non-farms data from the US for March. Right now, the expectation is that a moderate number of jobs were created last month. Of course, as it usually goes, if the data is overly upbeat it will likely work against metals whereas an overly weak report will more than likely play in the favor of spot values. Jobs data is viewed as especially important seeing as it is one of the major factors looked at by the Fed when considering the hiking of interest rates going forward. We have been on the receiving end of a lot of great jobs data recently, and most are expecting that this week will be no exception.
Though gold and silver spot values performed decently on Monday, their forward progress was halted by the fact that the USD Index is bouncing back from multi-month lows recorded last week. As investors grow increasingly optimistic with regard to what the forthcoming days’ worth of economic data is going to show, the greenback is benefiting.
The reports released today—regarding construction spending and manufacturing activity—were both overly positive, and this is something that helped drive the greenback forward. With some investors beginning to bet that President Trump will imminently make an announcement regarding massive tax reform, the Dollar seems to have found solid footing once more. This is something that prevented gold and silver from having a great day on Monday, and is something that may continue to negatively affect metals as the duration of the week plays out.
It goes without saying that Monday was a fairly slow day across the global marketplace. The US data that was dealt did not carry too much weight with investors, most of which are looking forward to bigger data points later in the week. Gold and silver are hanging on and have even gotten the week off to positive starts, however if US economic data is as upbeat as so many people are anticipating, there is no saying how the rest of the week will pan out for spot values. Right now, growing risk-appetite is actively pressuring metals.