Posted on July 18, 2014
Gold Spot Price Open: $1,318
Gold Spot Price Close: $1,311
Change in Gold Spot Price: -$7
Silver Spot Price Open: $21.16
Silver Spot Price Close: $20.90
Change in Silver Spot Price: -$0.26
Precious metals are trading down across the board to close what has definitely been an interesting week of trading. When all was said and done on Friday, gold lost close to 8 dollars while silver’s losses came in at just over 25 cents. Platinum and palladium also fared poorly today, despite supply shortage concerns continuing to persist.
After the last two weeks failed to provide much of anything in the way of real markets-moving geopolitical happenings, this week was bound to offer something different. Among the big news stories this week were the Israeli offensive on the Gaza Strip and yesterday’s downing of a Malaysia Airlines flight. Due to the fact that both of the aforementioned scenarios are still unfolding, it is likely that we will be talking a lot more about violence across the globe in the coming weeks.
Despite safe-haven demand for precious metals currently trending upward, metals’ spot values are declining today due to a corrective pullback after yesterday’s gains. What’s more, surging US equity markets today are also making it difficult for precious metals to do anything apart from trend sideways to downward. Over the weekend and into next week, I expect that we will find out much more about who shot the rocket that downed the Malaysia airlines flight as well as where exactly it was shot from. Now, however, the market is left to speculate with what little information has been made public.
Perhaps most confusing for investors today is the fact that US equity markets are continuing to add value, even in the face of all this violence and uncertainty across Europe and the Middle East.
Fueled by a week of strong earnings reports, US equities are continuing to trend higher by the day. While most stocks paused in the immediate aftermath of the Malaysia Airlines incident and Gaza Strip invasion by Israeli forces, things got right back to normal once US markets opened today. Attempting to make sense of rising US equities despite all this violence around the world was Peter Kenny, chief market strategist at Clearpool in New York, when he was quoted as saying, “It seems counterintuitive given the ruthlessness with which the market sold off yesterday, but in the broader context the markets are generating a lot of attractive themes.” He went on to cite a week’s worth of upbeat corporate earnings reports and a generally improving outlook on the US economy as two of the big reasons behind why the Dow, S&P 500, and Nasdaq are all showing continued signs of improvement amid a market atmosphere that, from the outside, looks as though it would be adversarial to US equities.
Despite falling from early morning highs, the US Dollar is still in prime position to close out this trading week in positive fashion. While a bunch of other currencies are faltering, the greenback has been seen adding value at every turn. The Japanese Yen was the only currency able to put up much of a fight against the USD this week, but even it did not fare entirely too well. It will be intriguing to see if the USD index, through the weekend and into next week, will be able to finally break out of the well-defined range it has been trading in lately, or if things will continue along as they have for the past few weeks.
As we bring this week to a close and look ahead to next week, there is no doubting that the attention of the marketplace will continue to be placed directly on the results of the investigation regarding Malaysian Airlines flight MH-17. Attention will also be paid to the continued Israeli offensive on the Gaza Strip and the massive civilian casualties piling up there, but the incident in Ukraine really has the world’s attention at present.