Gold Spot Price Open: $1,225
Gold Spot Price Close: $1,218
Change in Gold Spot Price: -$7
Silver Spot Price Open: $15.09
Silver Spot Price Close: $14.94
Change in Silver Spot Price: -$0.15
Precious metals continued to slide on Monday as a better risk-appetite was prevalent across most major global markets. When all was said and done, gold lost roughly 7 dollars while silver moved downward by about fifteen cents. Platinum and palladium moved downward on Monday too, both by about 15 dollars.
Dollar Weaker, Oil Weaker, Metals Weaker
Monday was a slow day across the board with very few pieces of fresh news streaming in. As a result, we saw the US Dollar, which hit a near seven month low last week, continue its recent downtrend. In addition, crude oil continued to move downward. The thing is, crude oil’s recent moves downward have been bringing most commodities, including precious metals, along with it. This has largely not been the case over the past few months but is slowly beginning to change.
Speaking of crude oil, there is a meeting of major oil-producing countries looming and investors are already beginning to speculate about what, if any, changes will come as a result. This is not unusual seeing as OPEC nations have been unable to come to any real agreement with regard to cutting oil production at both of their recent meetings. The thing is, even if OPEC nations did cut oil production it is likely not going to matter as a resurgent Iran will simply step in to fill the void created by countries like Saudi Arabia and Venezuela cutting production.
It will be interesting to see what happens going forward now that oil and metals are restoring their relationship as two assets whose price action correlates. Over the past few weeks precious metals have been taking hits at most every turn, and if the interest rate speculation leans towards expecting rate hikes sooner rather than later the near-term future for metals may not look all that bright.
Eyes Turning to Europe’s Shaky Economy
It has been a while since we touched on this topic, but Europe’s economic situation remains bleak despite countless efforts to correct things. Part of the reason we haven’t touched on Europe lately is due to the simple fact that no one really knows what to make of the situation there. One day we hear that economic recovery is happening as we speak, and then the next week we hear the opposite. Most recently, there have been rumors circulating that the ECB may send checks out to all citizens in order to boost spending and help inflation recover a bit. These are nothing more than rumors, but do well to highlight just how dire the region’s situation truly is.
Since the global economic recession of 2008, many economies, like that of the United States, have shown marked signs of recovery and are more or less back to normal. Europe, on the other hand, has not come close to recovering like the US has. Sure, at times there are periods of growth in the region, but they are mostly isolated and not at all indicative of a complete economic turnaround. Over the coming months it will be interesting what kind direction the European economy heads in. Right now, there is a growing number of people who think that another widespread recession is more of an inevitability than anything else.
Wrap-Up
All in all, Monday was a slow day at the office for most people. Gold and silver continued to suffer at the hand of stronger risk-appetite, and crude oil seems to not be helping precious metals much at all either. Looking ahead to the rest of the week, investors will be curious to see if the Dollar’s downward trajectory continues, or if things will begin to get a little bit better as more and more people become convinced that rate hikes are coming sooner rather than later.
