Gold Spot Price Open: $1,232
Gold Spot Price Close: $1,225
Change in Gold Spot Price: -$7
Silver Spot Price Open: $15.17
Silver Spot Price Close: $15.05
Change in Silver Spot Price: -$0.12
Precious metals moved back downward on Wednesday after crude oil prices rallied. When all was said and done gold lost about 7 dollars while silver fell by a little more than 10 cents. Platinum and palladium, for a second consecutive day, did not do all that much moving, but platinum did lose about five dollars.
Crude Oil Rallies as Inventories Decline
Stocks, for the most part, recovered from Tuesday’s losses as crude oil edged higher for the first time in a few days. A major contributing factor to crude oil moving upward was an unexpected decline in domestic (US) inventories. Over the course of the past 7 days, US inventories of crude oil have declined by nearly 5 million barrels. This is in stark contrast to expectations that inventories would increase by more than 3 million barrels.
Crude oil’s rally started before US inventories were published as Kuwait’s governor for the Organization of Petroleum Exporting Countries announced that April 17th’s meeting has a good chance of producing some sort of deal that would halt production, or at least reduce it, for a specific period of time. Still, the fact that Iran has repeatedly refused to participate in any meetings related to cutting oil production has some people thinking that any efforts by countries like Kuwait and Saudi Arabia to cut production will be in vain. Still, there is some hope that a deal will be reached and that oil production will be cut in such a way that prices rise, and rise consistently over the next few months. There has been a bit of a resurgence on the part of crude oil recently, but this has been limited and sporadic in nature and in no way fervent enough to bring spot values back to what they were even a year ago.
German Industrial Output Puts Positive Spin on Bleak European Situation
In recent weeks and months, it seems as though every report relating to European economic data has been poor. In a report released today, industrial output in Germany fell in February, but not by as much as was expected. Industrial output moved upward in January, and that is the main reason why analysts were expecting a dip in February. Though a dip is exactly what they got, the dip was so small that investors and analysts alike were encouraged that perhaps Q1 data might not be as poor as originally anticipated.
Dekabank economist Andreas Scheuerle commented on today’s data by saying, “Looking at January and February together, the picture is looking bright. Industrial production is pointing upward. But nobody should take this as a sure-fire success for the rest of the year. The problems on global sales markets are not solved yet.”
So while this data was nice to see, it in no way means that Germany nor the rest of the EU is out of the woods quite yet. We need to see strong data from Germany throughout the rest of the year for this to be the case. In fact, it would be nice if the rest of Europe could pick up some of the slack because Germany seems to be carrying most of the weight at the present moment in time.
Wrap-Up
All in all, Wednesday was not the best day for gold and silver but did emit a good bit of data. Looking ahead to tomorrow, we will see the weekly jobless claims report, which will be the first for April (though the data will mostly be regarding the last week of March). For gold and silver, it will be interesting to see if spot values can rebound and finish the week on a positive note.
