Gold Spot Price Open: $1,171
Gold Spot Price Close: $1,174
Change in Gold Spot Price: +$3
Silver Spot Price Open: $16.14
Silver Spot Price Close: $16.04
Change in Silver Spot Price: -$0.10
Precious metals ended the day mixed, but neither metal really moved all that far from where they began the day and week. When all was said and done, gold managed to gain about three dollars while silver declined by roughly ten cents. Platinum and palladium also finished the day mixed, but also did not venture entirely too far from where they started the day.
Gold Capitalizes on Weaker Dollar
The beginning of last week saw the USD Index take a noticeable dive before managing to rally by the time last week’s 5-day trading session came to an end. Over the weekend and continuing into today, the Dollar cooled off a bit and interest in gold and silver perked up. The reason we have seen increased physical demand for both gold and silver over the course of the past few days is mostly due to the fact that spot values are so low they are prompting a good bit of bargain-hunting purchases. Also helping the metals market on Monday was the fact that US equity markets also cooled off a bit and were not seen advancing forward.
Despite today’s progress of sorts, the overall outlook on precious metals is nothing to write home about. According to Ole Hansen of Saxo Bank, “We managed to claw back and close above $1,170 on Friday and today the market took a little bit of comfort from a slightly weaker dollar. Fundamentals don’t add much support to the gold move but at the same time we are finding some buyers at this level.”
Obama Comments on Greek Debt Situation
We have been discussing Greece’s inability to meet foreign creditors’ demands for the last few months now, but so far we have yet to hear any commentary from the US President regarding the matter. That all changed today when Obama was quoted as saying that the Greeks will need to reform their economy through “tough political decisions.” At the same time, Obama made it clear that creditors should not set forth payment demand that are impossible to reach. Taking more of a middle-of-the-road stance, Obama’s comments were not reacted to all that much by the wider economic marketplace.
If you can remember, last Friday saw Greece choose to bypass a scheduled loan repayment; opting instead to bundle all June payments into one larger, single payment to be made later this month. To me, and to many others, this move is nothing more than Greece stalling as their government constantly scrambles to find additional funding from any source that is willing to give them money. As you can probably expect, Greece will remain in the news until some sort of lasting decision is reached regarding their debt repayment structure. For now, all of the uncertainty surrounding Greece is helping gold and silver a bit by spurring forward some safe-haven demand. With that said, however, demand for metals stemming from the situation facing Greece is doing more in the way of preventing gold and silver from suffering bigger losses more so than it is contributing to any gains.
Wrap-Up
Today didn’t offer up the most exciting day in recent history, but was not completely devoid of economic activity either. Moving ahead, we are expecting a good amount of May economic data to be made public, most of which will play some role in shaping how the market feels about the timing of interest rate hikes in the United States. Other than continued analysis of US economic data and what is happening with Greece, this week is not expected to be all that action-packed.
