Posted on July 15, 2015
Gold Spot Price Open: $1,157
Gold Spot Price Close: $1,150
Change in Gold Spot Price: -$7
Silver Spot Price Open: $15.43
Silver Spot Price Close: $15.18
Change in Silver Spot Price: -$0.25
Precious metals moved even further downward on Wednesday thanks to some remarks made by Federal Reserve Chair Janet Yellen. When all was said and done, gold lost about 7 dollars while silver lost more than 20 cents. Platinum and palladium also moved downward on Wednesday, but neither metal moved downward by more than ten dollars.
It’s been a while since we have discussed the timing and extent of interest rate hikes, but that subject has once again made its way into the headlines thanks to some remarks made by Janet Yellen today to the US House of Representatives Financial Services Committee. In a prepared speech, Yellen maintained that the US economy is expected to continue growing at a respectable pace, and is not likely to be thrown off course by events unfolding overseas such as the turmoil in Greece and China.
Though Yellen maintaining that interest rates would be risen this year is not news to many people, it did come to the aid of the US Dollar and, in turn, hurt spot values even more. According to Commerzbank market analyst Daniel Briesemann commented on today’s events by saying, “Yellen confirming that the Fed will raise interest rates later this year is nothing new, but nevertheless this helped the dollar to appreciate, which is weighing on the gold price. We’ve also had better-than-expected economic data out of the United States, both before and after Yellen’s words, so that is also supporting the dollar.” Clearly, as has been the case for a while now, a lack of any fundamentally bullish news is preventing metals from moving forward and, in fact, is actively keeping values subdued.
Despite the last few weeks painting a rather turbulent picture of the Chinese economy, figures released today showed that the Chinese economy actually performed quite well during this year’s second quarter. During the second quarter, Chinese GDP surged forward by more than 7% on an annualized basis, spurred by economic stimulus moves introduced at different points both before and during the quarter. During June alone, industrial output rose by almost 7% while fixed-asset investment increased even more dramatically than that.
Even retail sales beat economists forecasts and rose by more than 10% during the month of June alone. Though the Chinese stock market has since cooled off from the run we witnessed throughout the second quarter, it is clear to see that China’s economy is not doing as poorly as some people might like to think. Still, the Chinese housing market is lagging behind and is continuing to suffer. If there was any downbeat points from today’s Chinese economic report, the report on housing and property sales was it. In order to combat this, many analysts think that China will further reduce its banks reserve requirement ratio in order to encourage lending to prospective home buyers. This, in conjunction with interest rates that are being continuously slashed are two factors that many hope will grow the ailing Chinese real estate market. If that aspect of China’s economy can be figured out, there is no reason why the Asian giant will not be a front-runner in the global economic race. That much, however, remains to be seen at this point.
Looking ahead to Thursday, the big data point of the week will be released in the form of the most recent weekly jobless claims report. After last week’s data showed an increase in jobless claims that was not expected, most are hoping for things to normalize a bit with tomorrow’s data. Also, tomorrow will bring about the final results of the Greek parliamentary vote regarding the debt-relief deal that was agreed to earlier this week. This is a big deal and stands the chance to affect most global markets.