Posted on July 16, 2014
Gold Spot Price Open: $1,297
Gold Spot Price Close: $1,299
Change in Gold Spot Price: +$2
Silver Spot Price Open: $20.90
Silver Spot Price Close: $20.87
Change in Silver Spot Price: -$0.03
Precious metals experienced mixed price action today, but saw early gains fueled by some upbeat economic data from China. When all was said and done, gold was able to pick up roughly 2 dollars while silver declined by just a few pennies. Platinum and palladium both added value today, but like gold and silver, gains were marginal at best and were waning towards the end of the day.
The US Dollar edged to its highest point in nearly a month shortly after Janet Yellen began addressing the House Committee on Financial Services. Helped by a number of rival currencies faltering, the US Dollar only seems to be getting stronger by the day.
In her remarks to Congress today, Ms. Yellen did not stray too far from the sentiments she expressed a day ago. Making sense of the situation was Brian Daingerfield, currencies expert at the Royal Bank of Scotland, who said, “If the economy and the labor market continue to improve faster than the Federal Reserve expects, then that may mean that rate hikes could come sooner and would progress faster.”
Currently, there are a number of investors who are interpreting Yellen’s statements over the past two days as meaning that interest rates will be raised sooner than originally anticipated. As you probably already know, the growing belief that interest rates will be raised in the somewhat near future is weighing on precious metals.
During the overnight hours, a number of economic reports from China were made public, and most of them are being perceived as slight bullish factors for precious metals and most raw commodities.
The first report released overnight held that Chinese GDP growth for the second quarter of this year came back at 7.5% on an annualized basis. This level of growth slightly bested market expectations for GDP improvement which were somewhere in the neighborhood of 7.1%-7.4%. Following that upbeat report were June industrial production figures showing an increase of more than 9.2% on an annualized basis. This also beat market expectations, which were anticipating industrial production to grow by no more than 9%.
While these reports did not do too much in the way of pushing spot values forward, they did afford gold, platinum, palladium, and silver a bit of respite after two days’ worth of losses.
After finishing Tuesday in somewhat disappointing fashion, US stock indexes rebounded mightily in early trading on Wednesday. Fueled by some upbeat earnings reports, US stocks are performing significantly better today than they have over the course of the past 3-4 trading sessions.
This week has thus far played host to a few upbeat earnings reports, including an Intel report claiming that earnings jumped by more than 40% during 2014’s second quarter. Dave Roda, a chief investment officer at Wells Fargo, provided a recap of the latest batch of earnings reports when he said, “We’ve seen some pretty good earnings reports across different sectors. We’re seeing a lot of (corporate deals), we’re seeing a lot of share buyback announcements, things that really do help prop up markets.”
Chief among these (potential) corporate deals was a reportedly $85 billion bid by Rupert Murdoch’s 21st Century Fox to buy out Time Warner Cable. Despite Time Warner rejecting Murdoch’s bid, the disclosure of the offer alone was enough to boost the value of Time Warner’s shares by almost $12.
As we head into the last two days of the week, investors and market analysts will continue to keep an eye on the type of affect the continued release of corporate earnings will have on US equities. Despite there being a whole host of ongoing geopolitical developments, the market has chosen instead to focus on equity markets and the various pieces of economic data that are being made public. Any one of the ongoing geopolitical crises stands the chance of affecting the marketplace in one way or another, but such has not been the case this week.