Gold Spot Price Open: $1,222
Gold Spot Price Close: $1,214
Change in Gold Spot Price: -$8
Silver Spot Price Open: $16.36
Silver Spot Price Close: $16.20
Change in Silver Spot Price: -$0.16
Precious metals continued to fall on Friday thanks to some economic data from the United States that showed that first-quarter GDP data was better than initially reported. When all was said and done, gold lost another 8 dollars while silver was down by more than 15 cents. Platinum and palladium finished the day and week down as well.
GDP Data Revised Upward
Gold and silver were dealt yet another blow, while the outlook for interest rate hikes was shifted again, as some key US economic data was dealt during the morning on Friday. The US Commerce Department announced today that their initial reading regarding GDP during the first-quarter of this year was lower than what it should have been. While initial readings showed that the US economy grew by just .5% during the first-quarter, today’s revised data showed that the economy actually grew by .8%. This is not much, but it reinforces the belief that the US economy may be willing to withstand another interest rate hike.
As you might have expected, the USD Index was supported by the upward revision and this only ended up pushing precious metals even further into the hole. In fact, losses were recorded for both gold and silver a majority of the days this week and that may be a recurring theme for the next month or so as investors begin to price in what is looking increasingly like an inevitable interest rate hike.
For metals, this marks the 4th consecutive week of losses. We are now seeing charts take on more of a weaker posture and that is likely only going to intensify as the weeks wear on. That is, of course, unless we receive some sort of unexpected piece of news that would be of bullish nature for metals.
Janet Yellen Speaks
With most investors already starting their Memorial Day holiday today, the marketplace was generally quieter on Friday and that does not lend itself to precious metals. What investors did pay attention to, however, was a speech delivered by Fed Chair Janet Yellen. There has been a lot of commentary recently from voting members of the Federal Open Market Committee, but Yellen has remained mostly quiet over the course of the past 2 weeks.
In her speech made this afternoon, Yellen maintained that June interest rate hikes are a very real possibility so long as the tone of economic data continues to be as it has been for the past few weeks. In fact, this week along brought with it a bunch of upbeat data from the United States that worked against precious metals considerably. Even if economic data does begin to falter a bit, it seems as though we have reached a point where it is going to take a lot for investors to be convinced that June is not the time when we will see rate hikes. Yellen also alluded that, beyond June, rates may be risen a few more times before the year is over.
Fortunately for gold and silver, such consistent and dramatic losses may soon be in the rearview mirror as investors price in the pending rate hike. While it may still be difficult for gains to be made in consistent fashion, investors can at least take solace in the fact that massive losses may soon be a thing of the past.
Wrap-Up
All in all, Friday went about the same exact way as most other days this week. Apart from continued discussion about rate hikes and all that comes with them, the marketplace was devoid of any fresh talking points. As much as I would like to say next week will be different, it is difficult to envision a scenario where investors do not continue to pick apart just exactly what raised interest rates mean for them and their future investing decisions.
