Gold Spot Price Open: $1,232
Gold Spot Price Close: $1,223
Change in Gold Spot Price: -$9
Silver Spot Price Open: $16.29
Silver Spot Price Close: $16.29
Change in Silver Spot Price: NO CHANGE
Precious metals continued to trend downward on Wednesday as the global marketplace grows increasingly bearish for gold and silver. Gold ended up losing about nine dollars on the day while silver remained more or less unchanged. Platinum and palladium both trended downward on Wednesday, but their losses were mostly negligible.
Crude Oil Hitting New Monthly Highs
A feature in the marketplace for most of the past week and a half or so has been the unexpected ascent of crude oil prices. Thanks to supply shortages from different parts of the world, the price of a barrel of crude oil has been inflated. With that being said, however, market experts are warning people to not get too comfortable with the current trajectory of crude oil because it may all be turned around before long. Should things in Nigeria settle down and the Alberta wildfire be extinguished, the supply-glut that has been a feature for much of the last year or more will likely be reinstated, so to speak.
While the last week of positive movement for crude oil has not really translated into precious metals being able to make sustained gains, it has definitely helped gold and silver limit losses. Should the upward direction of oil be halted and spot values pushed downward again, gold and silver may see even larger losses than they have for the past few weeks. For now, however, it is looking like crude’s most likely move when this rally is complete will be to trend mostly sideways. Of course, these are only projections and are not necessarily set in stone as definite.
Stocks Improve as Rate Hike Talk Continues
US stocks, seemingly across the board, rose on Wednesday and has one of their best collective days of the year thanks to increased optimism as it relates to the likelihood that interest rates will be raised in June, and possibly even a few more times before year’s end. Bank stocks in particular did well on Wednesday as investors begin to realize that higher rates will also likely mean larger profits for major financial institutions. Bank of America, for example, saw its stock increase by right around 2% on Wednesday alone.
Matt Maley, an equity strategist with a New York-based firm spoke on equities’ performance this week by saying, “Yesterday was certainly a big day, and with the breadth in the market and some of the key groups rallying with bank stocks and semiconductor stocks, there are things telling us that we might be able to hold the rally this time. We’ve gone from mixed signals from the Fed to a unified chorus that we’re going to hike, but the markets are not pricing in a June hike.”
In addition to last week’s FOMC minutes alluding that rates would be hiked in June, other members of the Fed have come out in the wake of the minutes and confirmed their intent to push rates higher at least once in June, and maybe even higher than that beyond June. For the first time in a while it seems as though there really is a consensus amongst members of Federal Reserve. This is bad news for precious metals, just like it was in the immediate lead-up to rates initially being hiked all that time ago.
Wrap-Up
Gold and silver performed poorly yet again on Wednesday, but investors can take some solace in the fact that Wednesday’s losses were not nearly as bad as they could have been. Though it may not seem like it, gold and silver really are being supported by the fact that crude oil is currently on the up and up. Tomorrow is not expected to bring about a massive quantity of economic data, but investors will be
