Gold Spot Price Open: $1,252
Gold Spot Price Close: $1,230
Change in Gold Spot Price: -$22
Silver Spot Price Open: $16.47
Silver Spot Price Close: $16.18
Change in Silver Spot Price: -$0.29
Precious metals continued spinning their collective wheels on Tuesday as a few bearish factors forced spot values even lower. When all was said and done, gold ended up losing more than 20 dollars while silver finished downward to the tune of almost 30 cents or so. Platinum and palladium both also lost on the day, but neither metals’ losses eclipsed the 10 dollar threshold.
Stronger USD Index Pushes Metals Downward
The spot value of gold hit a fresh 4-week low on Tuesday just shortly after US markets opened. This was the case mostly due to the greenback making gains immediately after the day began. Really, the USD Index has been faring very well ever since the latter parts of last week, when it was announced, via the latest FOMC minutes, that rate hikes very well may become a reality in June.
In fact, while gold opened the day around a 4-week low, the USD Index began the day nearing a 7-week high. With the way the attitude of global investors has been heading recently, there is very little out there which would lead us to believe that precious metals will be making any significant amount of ground back anytime in the near future.
While only a month ago it might have been viewed as being a bit premature for investors to be expecting a rate hike at any point in the near future, we are now hearing murmurings of Fed members who say the US may see at least 2 or 3 additional hikes before the year is through. Of course, there is very little to support this at the present moment in time, but that may change very soon if the FOMC meeting has anything to say about it.
Oil Trying to Move Upward
Crude oil was seen on Tuesday moving upward in the early morning hours as supply shortages were still a fixture on the minds of most investors. The big news of the day in the crude oil world was a data release pertaining to US holdings, which were expected to have decreased week on week. In fact, much of the past week or so has seen the spot price of crude oil increase due to supply shortages; something that we thought we might never see in 2016. Thanks to unrest in Nigeria and a blazing wildfire in Canada, the world marketplace is playing host to more than 2 million fewer barrels of crude oil each and every day.
US oil supply showed, as expected, that crude oil stockpiles in the US dropped as expected. As a result the spot value of crude oil gained considerably. Of course, this did not end up helping gold and silver all that much, but may prove to be a bullish underlying factor as we head further through the month of May and into the all-important month of June.
For gold and silver, this is yet another bearish factor as metals tend to positively correlate with the value of crude oil. If oil continues to falter, and the Dollar continues to grow in strength, there will not be much for gold and silver to do other than lose value. Barring any markets-moving data in the coming days, it seems as though metals are on course for yet another rough week.
Wrap-Up
Once again, Tuesday did not offer much in the way of fresh economic data from the US nor elsewhere around the world. As has been the case for approaching a week now, investors were concerned with rate hikes and when, exactly, they might be coming, as well as how severe they are going to be. This week is sure to pick up a bit more momentum before we head into the holiday weekend, but so far things have been quite slow apart from metals losing value at seemingly every turn.
