Posted on May 30, 2014
Gold Spot Price Open: $1,256
Gold Spot Price Close: $1,250
Change in Gold Spot Price: -$6
Silver Spot Price Open: $19.09
Silver Spot Price Close: $18.87
Change in Silver Spot Price: -$0.22
Even though it was looking this way all week, today marked the day where precious metals spot values finally fell below some key price points. When all was said and done, gold lost about 6 dollars while silver declined by little more than 20 cents. Now, spot gold is in the neighborhood of $1,250/ounce while silver’s spot value has finally fallen below an even $19/ounce.
Seeing as gold and silver spot values have traded sideways for the past few weeks, there has been a growing sense that metals were on the verge of making a move, though no one was entirely sure which direction spot values would head. By midday on Tuesday, however, investors received their answer as spot gold and silver plummeted in value. Shortly thereafter, it became painfully obvious that the market bears had seized control of the precious metals market.
This week saw a number of factors work against gold and silver, but what hurt them the most was the fact that there were so few inputs making their way to the market. The crisis in Ukraine has been seen fading to the background of the marketplace’s attention and has more or less eliminated safe-haven demand for precious metals. With the European Central Bank scheduled to meet early next week, investors mostly held their positions throughout the last two or three days of this week. Currently, the overriding belief is that the ECB will announce their plans for fresh monetary stimulus throughout the EU. Deflationary pressures have been building in and around Europe for the past year or so and many market experts feel as though the ECB has no choice but to loosen monetary policy. Unfortunately for precious metals, however, looser European monetary policy will most likely cause the USD to gain value and thus put even more pressure on gold and silver.
It will be interesting to see what precious metals do over the weekend as the market continues to gear up for the only noteworthy event on next week’s slate.