Gold Spot Price Open: $1,195
Gold Spot Price Close: $1,186
Change in Gold Spot Price: -$9
Silver Spot Price Open: $16.85
Silver Spot Price Close: $16.56
Change in Silver Spot Price: -$0.29
Precious metals haven’t been moving all that much thus far this week, but today metals moved backwards a bit thanks to a stronger economic outlook for the European Union. When all was said and done, gold lost close to ten dollars while silver lost a little more than 25 cents. Platinum and palladium both finished down by about ten dollars.
Draghi Comments On Upbeat European Growth
During a public address made on Wednesday, European Central Bank president Mario Draghi made it clear that the 19-member European Union has been and continues to show signs of improvement. In the wake of his remarks, the Euro currency surged to a fresh two-week high as the US Dollar took a bit of a hit. Draghi went on to say that the European Union will more than likely see inflation begin to pick up as we approach year’s end. In addition, he said that he and his colleagues are absolutely committed to their current bond-buying initiative and plan on seeing it through to its scheduled completion. In the same breath, he went on to say that he does not see any reason why an expansion of this accomodative monetary policy will be necessary.
Draghi’s confidence in the EU economy has recently been called into question by Greece and their inability to pay back creditors, but that situation is slowly but surely fading to the background of the market’s attention. In fact, we should be finding out over the next 2 to 3 days whether Greece will be able to make scheduled debt repayments to the IMF, or if they will default on those obligations. As you may or may not be aware, Greece defaulting on debt repayment obligations will likely result in them being ousted from the European Union altogether.
ADP Employment Report Shows 200,000+ New Jobs Added
For the first time in 2 months, the ADP report showed that private sector employment rose by more than 200,000. Being that private-sector job growth was in the 160,000s last month, it is nice to see figures continuing to improve. Looking ahead, the rest of the week will be consumed by speculation regarding when and by how much non-farm payrolls have grown by in May. Expectations are for job growth of well over 200,000, but there is no real way to tell what happened last month.
If job growth continues to improve, it is highly likely that we will see precious metals continue to suffer. The reason for this is due to the fact that improved employment will likely mean that interest rates are going to be raised before the end of the year. With the FOMC meeting for June scheduled to take place in a little less than 2 weeks, I imagine that we are in for an action-packed marketplace over that course of time.
Wrap-Up
Wednesday was the third day of this trading week, but for precious metals it was more of the same. Metals have been unable to move too far in any one direction, and if anything, it seems as though both gold and silver may be poised to move lower if global economic conditions are such that investors are taking on a bit of a more drastic risk-appetite. As far as the last two days of the week are concerned, the biggest concern for investors is the employment report from the month of May.