Posted on May 19, 2014
Gold Spot Price Open: $1,292
Gold Spot Price Close: $1,293
Change in Gold Spot Price: +$1
Silver Spot Price Open: $19.42
Silver Spot Price Close: $19.43
Change in Silver Spot Price: +$0.01
Gold and silver made strong gains to start the day but conceded them en route to ending the day in more or less the same position in which they started. When all was said and done, gold gained about one dollar while silver was able to pick up only a penny or two.
Today was a quiet day from a US economic standpoint, but that didn’t prevent precious metals from taking part in a lot of price action. European stock markets were the talk of the investing world today as many of them traded down, led by a particularly poor Italian stock market. In addition to the poor equity performance, bond yields in Spain and Italy are on the rise which may end up leading to more pressure being put on lower to mid-level economies in Europe. All this action in Europe is only adding to the belief that the European Central Bank is going implement some sort of monetary stimulus at next month’s meeting.
As a result of all this monetary stimulus talk, it only makes sense that we discuss the possible ramifications of such a move for the spot values of gold and silver. While it is an almost undeniable truth that any and all monetary stimulus measures work in the favor of precious metals, such may not be the case this time around should the ECB loosen European monetary policy. The reason for this is due to the fact that looser monetary policy will almost inevitably drive down the value of the euro currency. A declining euro will likely translate into a stronger US Dollar which, in turn, has the chance to put downward pressure on spot gold and silver. None of this is solid fact just yet, but it does a good job of explaining why gold and silver spot values are remaining planted to the ground, even amid all this monetary stimulus talk.